Since COVID-19’s outburst in March 2020, grocery retailers were challenged to ensure that essential items would get to their customers’ homes – after all, safety comes first, and going to physical stores was no longer a viable option for many people. In that sense, size doesn’t matter: from big chain stores to smaller, local markets, grocers were faced with the challenge of delivering essential products to clients all over, going beyond the physical store.
The way of doing so? Going online.
There has been a significant increase in online grocery shopping rates, and some grocers around the world have recorded over 100% YoY growth. New eating and food shopping habits caused by financial difficulties and health concerns changed the customer-store relationship, especially in the digital landscape. In 2020, 52% of consumers said they had bought groceries online, and 62,5% said they were planning to, compared to 36,8% and 39,5%, respectively, in the previous year.
With consumers’ interactions with companies being 60% online and 40% offline, it’s become crucial to build an online presence focused on growth and sales. The transition between offline to online or the transformation of online architecture, software and/or structure are important improvements that brands have been investing in for the past decade as this shift has affected different economic layers and markets.
Even though the foundations of ecommerce are mostly the same, the specific challenges and particularities of the grocery retail industry must be a guide for identifying the best ecommerce platform for your business.
When it comes to shopping for food, specific requirements follow: refrigeration, keeping fruits and vegetables fresh, selling by weight… The list goes on: perishable goods, picking and packing processes according to customer preferences.
Offering a complete and proper experience offline can be easy, but talking about online grocery shopping, there are even more aspects to be considered, such as the necessity of accurate picking, replacing products to avoid stockout and assuring that the delivery is made on time. Moreover, grocers should offer an online experience as similar to the physical one as possible to guarantee competitive advantage, since the end consumer is demanding it each time more.
Simply put, an online grocery operation has several more challenges – and keeping these challenges in mind is key when choosing and prioritizing the capabilities you’ll need in an online grocery business.
First things first: it is important to make sure that the established bridge between physical and digital brand guarantees a seamless user experience, especially from those coming directly to the website as a physical-first customer.
In order to achieve that, and to keep pleasing customers, must-have functionalities include a high-quality website or app, logistics, inventory management, and reliable multichannel convenience, amongst others. These are of the most importance for online grocers, because they guarantee that all crucial parts of the operation are working. Combining different functionalities to those aforementioned can improve other parts of the online operation, making the online grocery shopping experience enjoyable and as close as possible to the “real” thing.
We’ve glazed through the must-haves, but, when you think about it, ecommerce platform characteristics are endless. There has to be deep thought and planning to understand what is necessary and what works for each business, its stage and its end customer. What should companies look at when analyzing whether an ecommerce platform is the best fit for an online grocery operation? Here are some of them.
The first-step when analyzing and choosing the best ecommerce platform for grocery businesses is calculating the total cost of ownership, or TCO. What is the product and its total value overtime?
Imagine that you want to buy a car. The car from brand X costs $27K, and the one from brand Y costs $30K. Which one would you choose? The cheapest, obviously. But when you factor in insurance, estimate repair services, extended warranty and assistance, brand X’s price goes up to $33K and brand Y’s to $31K. That’s the money you save by calculating TCO.
Over 32% of decision makers in companies use TCO to establish growth strategies and understand the pros and cons of expanding operations over time. Besides helping in justifying decisions, it brings in a guidance tool to avoid any kind of waste of money, assets or people when analyzing the best ecommerce platform. Does the platform charge for software updates, for example? That is something to be aware of.
There has to be a strategic financial background when choosing to move forward with these decisions for an improved long-term financial performance. Don’t forget to take into account all of the hidden costs.
The Order Management System helps improve how your business receives, processes, manages, and completes orders. This includes everything from collecting payment, shipping, issuing invoices, and reporting. It serves as the WMS connection to the ecommerce platform structure, bridging the gap between the inventory control picking system and other core online retail functionalities like the catalog, the cart, promotions and discounts.
For grocery retailers, logistics can prove to be difficult and, right at the top of the ecommerce platform checklist, after the OMS, is the WMS – or Warehouse Management System.
This system is often offered as a bundle for many grocery clients when acquiring an ecommerce platform service. The WMS is capable of managing the whole logistics process inside an organization’s inventory system, proving to be necessary to every grocery operation that aspires to be successful. It accelerates productivity, controls stored items, saves time and avoids failures, plus it integrates with other departments improving internal communication. This service is offered by different vendors all over and it needs to be integrated with the order management system.
Keeping products in stock is the main thing for grocery stores, especially when it comes to perishable items. Knowing how much more to buy and what are the main issues connected to storage stocking has to be the main priority both for the integration of online and offline stores, but also for the upkeep of the business.
In the online world, grocery shopping has been reduced to a recurring shopping experience. There are no free samples and less “product discovery” than in the physical store, so online customers keep on buying what they already know works for them. To make the most out of this situation, many grocery online stores have been investing in simplifying it, and keeping consistency for customers to keep coming back.
Some VTEX clients, like Walmart, in Argentina, and Zona Sul, in Brazil, have been using native modules available through the plug and play functionality of VTEX to make this recurring customer feel better when shopping online, while converting clients and turning them into regular ones. These services provide agility and scalability when it comes to implementing new strategies in a short period of time.
Instead of unrelated items placed far apart in a physical store, retailers and food brands can connect items in the ordering app or website. If a customer searches for hamburger patty, they might also get a recommendation for ketchup and mustard. Algorithms are the future to understand buying patterns and suggesting new items using what the customer frequently purchases as a reference.
Other examples of brands enjoying the recurring moment are creating a shoppable grocery list or subscription boxes, two small actions that can skyrocket conversion rates and cause a sales spurt more frequently. The shopping list doesn’t even have to be created by the customer, and it can be built by the patterns of prior weekly or monthly online grocery shopping. This way, the customer doesn’t have to browse through the options, and one click can bring all their groceries to their doorstep in less than a day. Subscription boxes are also very convenient. Imagine not having to worry about grocery shopping – ever again!
The CCX Company, in collaboration with VTEX Commerce Cloud, expresses gratitude for having had the opportunity to enhance its understanding of the advantages, trends, and other elements addressed in the current topic. This article was jointly developed and is brought to you by the VTEX Commerce Cloud team.
