Strategy

4 growth strategies to boost an online grocery retail operation

Gabriela Porto
Gabriela Porto May 20, 2021
4 growth strategies to boost an online grocery retail operation

From all the experiences and learnings that COVID-19 brought to the world, one of the most significant takeaways is that the future is unknown. In March 2020, when the pandemic was first declared and lockdown policies were put in place, there was a shift in consumer behavior and companies had to figure out how to accommodate their business models to fit new demands. 

The grocery industry, even though considered an essential service during quarantines and lockdown periods, saw the necessity to do the same: consumers were avoiding going to public places, such as the grocery store nearby, in the name of safety. The solution for that was to digitize  and transform its businesses into the online world by creating and/or improving grocery ecommerce platforms.

This change in consumers’ behavior promises to be long-lasting, going beyond the pandemic and changing the industry’s future for good. How can businesses adapt to this new scenario and foresee what’s coming? 

How to prepare for online grocery retail’s future?

For grocery retail businesses, this shift happened quickly, and adapting to these changes just as fast was the biggest challenge. Handling logistics, understanding the best way to deliver perishable goods on time, offering the best service and products to clients… That is just the surface of the online grocery retail never-ending sea of trials and opportunities. The key is being prepared to seize those opportunities as they come, preparing for the future before it happens. But don’t worry, you don’t need a crystal ball to be future-proof.

Researching and drawing up strategies by understanding the industry’s surroundings and previous patterns can be a great first step in that direction. If we had to put this in a quick formula, the equation would be simple: research + opportunity + action = growth. But there is more to it, so, let’s take a look at what is in store for online grocery retailers from 2021 looking forward and how to use that as fuel for growth.

Opportunities for grocery retail growth in the “new normal”

During the shift into the “new normal”, or the world in an advanced pandemic state, online grocery has been one of the industries with the biggest growth potential. Apart from social distancing, lockdowns, and other preventive measures, online grocery shopping proved to be a hustle-free alternative to the chore of physically going to the store. It’s safe, convenient, and time-saving. Leaving the traditional grocery to the side, the opportunities for growth show themselves in new ways to improve operations, even if the perspective is discouraging.

According to McKinsey’s latest report on the European grocery market, 2021 is a year to keep betting on grocery ecommerce because return expectations on regular brick-and-mortar stores are not yet promising. In that same report, CEOs who were interviewed mentioned words like “challenging,” “uncertain,” “price-focused,” “competitive,” and “online” to describe their expectations for this year.

But this shouldn’t deter grocers. If anything, it means there’s an opportunity to take your business to the digital sphere and to meet customers’ needs.

Grocery retail strategies for growth: a few examples

Now, on to some strategies that can help your grocery online operation soar in sales by using logistics, technology and innovation in order to provide the best user experience. The main goals are to build a loyalty relationship, improve delivery and shipping and optimize processes.

1. Use technology to accelerate growth

The experience should be frictionless not only for the customers but also for the business. When employing technology to get daily chores and challenges out of the way, via data usage, automated logistics, marketplace sellers, and more, there is enough time to focus on the core of your business, retail, and to work on bigger ideas.

Want to create an innovative pick-up system from scratch? Great, but not when the ship-from-store operation is still presenting troubles. In this case, a safer alternative is to look for an ecommerce platform that has the expertise and technical knowledge to structure the ecommerce grocery retail operation. Technology is essential as one of the foundations of ecommerce grocery retail operation and you should have a platform and partner in which you can rely on.

Ecommerce solutions such as composable commerce, for instance, can help in creating a personalized website for your brand in a way that best fits your business and customers’ needs.

2. Enhance fulfillment methods

Logistics can be troublesome for grocery retailers. Beyond making sure every order gets to where it needs to be on time, there is still the perishable factor. If I’m ordering ice cream as one of the items on my grocery cart, I expect it to arrive at my destination as if it just got out of the frozen section. Can you imagine getting liquified ice cream because the grocery store took a little longer to get to your order? That should be avoidable at all costs.

But time sensitivity isn’t the only thing to be mindful of. Grocers have been using different strategies to attend to the logistics issue that still haunts online grocery retailers. One of them is relying on omnichannel and marketplace architecture to integrate physical stores and ecommerce operations, helping the business run the extra mile for customers in a short time span. If one of my stores is closer to the customer than my distribution center, why would I spend effort trying to make my delivery time shorter from the distribution center?

And that goes beyond delivery. In an effort to bring customers closer, pick-up from store and curbside delivery have also been widely used by grocers as a way to attract reluctant online shoppers.

3. Offer stress-free and personalized online experiences

Buying online is a choice, especially when talking about grocery, which has a unique shopping experience with different requirements in quantity and quality — the average of items on a grocery cart goes from 35 to 45 and, for fresh items, there’s always the need to look for the best ones. The average storage capacity of a supermarket is only one day’s worth of fresh products, so making sure that they are delivered properly is in the client’s and the grocer’s best interest.

With challenges like that, how to make this online shopping experience more attractive to the client? The word you are looking for is frictionless. The goal is to make online grocery shopping even easier by personalizing the client’s journey on the website and saving time. In and out, quickly. The key is no disruption or distractions. 

If I accidentally leave my cart unattended at a grocery store and leave, it won’t be there when I return. So why return at all? But if I’m shopping online and I close a tab, when I get back my products can still be there. And that’s gold.

If a client gets their groceries every two weeks like clockwork and, through data, you see that they order basically the same essential items, why not offer them those products each time they come back? I know I would be tired of adding milk to my cart every time I went online grocery shopping. 

In this same topic there’s also the possibility to improve your ecommerce search engine: why not make it more intelligent and with the capacity to automatically fill the query and offer the specific product the customer’s looking for? That’s another way to save them some time and to also be capable of offering related items to the ones they’re searching for. Find more about intelligent search and its use in online grocery businesses.

4. Focus on building a relationship with customers

Now that proximity is not an issue anymore, why should a customer stick with your business when buying groceries online? If they can buy from anywhere and get it delivered to their houses, there is only one thing keeping that customer with you: loyalty. The key is to build that in any way possible, going from rewards programs, specific discounts for clients who are coming back, discounts for new customers, and so on. 

This relationship will be a key asset in the future, not only because it means that the same person is coming over and over, but it also means that they can become promoters of your brand and service, attracting more clients.

Grocery industry trends – what to look out for in your ecommerce operation

According to a report from McKinsey & Company, here are some of the trends that grocery retailers should be looking out for:

  • “Want some kale? It’s organic!” Customers are focusing on being healthier and are willing to spend more to be able to do so. They are the same clients who choose to shop local and sustainably. Offering organic and healthy products as an option can bring these people closer to your ecommerce.
  • Bargain, bargain, bargain. Many are struggling financially and look for discounts everywhere they can. This goes hand in hand with building a relationship with the customer: use discounts as a way to maintain an open-door policy between the store and the client.
  • Digital is Core. Being digital is on the rise and being online is fundamental for a business to successfully thrive in these times. But, make no mistakes. Physical stores are not dead, in fact, they are very much alive and well, and they can also work as an asset to help you propel your digital operation. 

  

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