Flybuy’s Executive Vice President of Global Partnerships, Jeff Baskin, recently took part in a Winsight Grocery Business & Incisiv webinar titled, “The Digital Grocery Outlook: The Year of Irrevocable Inflection.”
The webinar highlighted the findings from the 2nd Annual Grocery Digital Maturity Benchmark Report, which studied 195 attributes from the top 90 grocery retailers in the US, Canada, and Western Europe. Overall, it was found that COVID has completely recalibrated the adoption of online grocery, with a 60 percent increase in digital sales anticipated by 2025 and 40 percent of online grocery shoppers likely to continue shopping for all their groceries online post-pandemic.
So how can grocers prepare to capitalize on this expected growth? Here are some of the highlights the panel discussed:
Digital Grocery Maturity
Making the right digital investments now is crucial for success over the next five years, as the most digitally mature grocers grow 2.2x faster annually than their competitors.
Overall, shoppers have been patient with grocers as they have adapted this year, but there’s still a long way to go. Grocers must 1) put customers at the center of their processes and 2) understand what’s done in-store may not apply online.
In-Store vs Online Inventory
The study found a 3-5 percent uptick in basket size when grocers actively communicate with customers about their online order. This communication typically starts with finding a substitution for an out-of-stock item, but can continue by offering last-minute items that they may not have thought of. Communicating in real-time with customers can remove a lot of friction from the overall shopping experience.
Bring Back Impulse Buys
With so many customers now choosing an off-premise option for their grocery order, grocers are losing money where impulse buys are usually made: at checkout.
Grocers can earn some of this revenue back by implementing an enhanced location-based curbside pickup solution. By understanding a customer’s location, grocers can present impulse buys during the customer’s journey to the store or within specific proximity to the store. This essentially brings the checkout aisle to the curb via mobile.
Reduce Customer Friction
Communication is crucial as you add in curbside and BOPIS technology. Customers are used to shopping in a certain way – shop for items, pay at the checkout, and leave. So the addition of new shopping methods requires clear and consistent communication to educate customers on what to do.
Flybuy Pickup is triggered based on geolocation. As soon as a customer arrives at the store, the solution automatically communicates a welcome message and instructions on where to go/what to do. No more call boxes or the need for customer calling or texting when they arrive. Instead the entire process is now automated.
It’s automated for store staff, too. In fact, maybe the biggest benefit of our location technology is on the operational side, as it allows employees to prioritize what they’re doing and when (picking groceries or sweeping the floor). Since we know customers are 4x more likely to return if they wait less than two minutes for their order, empowering employees to plan to meet someone upon arrival can create an incredibly positive experience, likely creating a repeat customer.
Curbside grocery/BOPIS fulfillment capabilities have seen explosive and massive growth in 2020. In the past, these methods haven’t always been profitable. However, advances in technology mean that grocers can significantly drive revenue growth through curbside.
Picking is now part of fulfillment. Not profitable on its own, you can pave the way to profitability by first maximizing the speed, accuracy, efficiency of picking to reduce labor costs. Then focus on increasing basket size through conversational commerce that pulls customers into the store virtually and for the same reason(s) they shop there in person.
After all, commoditizing the shopping experience might work well for selling shoes or computers, but when shopping for food, we’re looking for quality, service, and the deep-seated feeling we get from our local grocer. So make customers feel like they’re in the store by telling them – in real time – about BOGOs, what’s currently at the meat counter, and what in-stock fruits look great this season. When you extend your brand online in this way you also increase basket size and, ultimately, profitability.
BOPIS and curbside pickup technology now make this possible.
There’s understandably been a focus in the last year on adding any and all curbside software/BOPIS technologies to meet the unprecedented consumer demand. Implementing a manual curbside pickup solution with an “I’m Here” button or a telephone number to call upon arrival was an important step for many grocers, but this type of solution can quickly become overwhelmed as order volume increases. In looking at the report’s data, if a grocer dropped in revenue rankings it wasn’t because they took away functionality, it’s because a competitor added functionality.
The report’s data shows that with 43 percent of shoppers having shopped online in the last 6 months, only 26 percent have done so at their preferred store, it appears many switched after having a bad digital experience where they normally shop. In addition, while grocery revenue has increased 60 to 100 percent during COVID-19, curbside pickup has increased 300 percent, which means there’s even more revenue to be made. Harnessing the potential revenue growth from curbside pickup requires implementing an automated location-based solution. The online grocery market is hyper-competitive and so focusing on creating a seamless digital experience for customers is crucial for success.
Grocers must now focus on understanding the ROI of each technological effort – and prioritizing them accordingly – to drive that revenue.
To download the Grocery Digital Maturity Benchmark report, click here.