There are approximately just over 40,000 grocery stores scattered across the country. There are few stores that conjure up that warm sense of the past; that nostalgia for simpler times of the local shop, whose owner knows their customers and vice versa.
But times are always changing. And particularly within commerce. Infused with digital, today’s grocery store is going through a transformation. And so see what the grocery store will look like in decades from now, we can take a closer look at what’s happening in the store today.
To prevent burying the lead, what we’re likely to witness is a small collection of ecommerce platforms, which have the ability to scale and are capable of solving complex issues that grocery stores have, to rise to the top and influence how the industry interacts with its customers.
One platform that has quickly shot into the lead is Instacart, that connects grocery stores with a delivery and pick-up service. Founded in 2012, the platform exploded during the pandemic. “It’s crazy to think about this,” said its president Nilan Ganenthiran, “but in a 2-to-4 week period, we experienced the adoption of grocery ecommerce that we were expecting to see in a 2-to-4r year period.
“We saw a 500% jump in order volume. Almost overnight, we saw basket sizes expand 35% and Instacart become a lifeline for people across North America looking to get their groceries and goods delivered.”
Elsewhere, Walmart is expanding its digital capabilities while unveiling its Walmart+program that brings together online and in-store benefits.
With digital firmly cemented into the behaviors of the average person, more and more platforms are going to be interested in the industry.
Sam’s Club opts for Oracle Commerce, Dollar General for Magento, and Walgreens for Salesforce Commerce Cloud.
This newer opening for grocery stores means that the industry is still a relatively fair game for ecommerce platforms; no one dominates the industry as of yet.
What platforms are used shape the way in which customers interact with a brand and inform their shopping experience, as well as shape how they fulfil their orders.
The added 20%
Despite the fact that the grocery sector is massive – $658 billion in yearly sales is expected this year – it has been performing pretty flat lately, specifically in the last half a decade.
Just like when there is a struggle to increase overall sales in one industry, there is another struggle between retailers, fighting among themselves for a greater share of the slowing size of consumers.
And how that struggle has played out in these 5 years has largely been within physical stores. That was… until March, 2020, when much of the economy went offline and almost all commerce went digital.
Even right now, approximately 80% of consumers still head to the local store to pick up their groceries.
That means 20% of consumers now buy more of their groceries online than in-store. That 20% of $658 billion is certainly a lot, and certainly enough to compete for. And within this percentage, 60% are millennials whose spending power will increase over the years.
In addition, among this 20%, almost all of them (8-in-10) said that all or most of their grocery shopping will continue to be made online, and part of their shopping routine.
Friction points
Digital grocery store experiences are a bit more complicated than other industries. The typical grocery store handles 40,000 bar codes and shoppers typically fill their baskets and carts with 30-50 products each time.
Logistics and product organisation for grocery stores are simply more complex. The best platforms discover ways to remove obstacles to fast and smooth shopping experiences.
And there are two types of digital drivers happening here.
Firstly, delivery services like Instacart team with grocery stores to handle the end-point; after customers have searched the digital shelves and filled their carts. These platforms deal with payment methods, shipping options, and ultimately deliver the groceries to customers. And certainly, handle the new ways of delivery such as click and collect and curbside pickup.
Secondly, ecommerce platforms are constructing entire online shopping experiences anchored to a grocery store’s website. Platforms like Salesforce Commerce Cloud that are built for complex brands that need tools to solve complex issues. They provide the whole service from the homepage and browsing experience to checkout.
So what now?
The digital race will heat up for greater customer share among the new 20% as we mentioned before. And one way to grab a greater share is to use digital tools and platforms to build better experiences not only on its website but across all of the platforms that the brand is on, and provide omnichannel solutions.
As we move into a world relaxed of social distancing and a reopening of the physical world around us, and away from a work-at-home environment to a hybrid environment, consumers are going to enter a more omnichannel experience – blending the online with the physical.
To keep pace with this change, stores that cover broader bases, from their store to their website and social media shops, are better placed to succeed in not only bringing in new customers but also building stronger relationships with them and forging brand loyalty.
So new tech and sophisticated digital platforms may just give the grocers a booster shot to improve their selling capabilities; an overall much nicer and smoother online experience; broader shipping options for new and relevant ways that customers want their goods to be delivered; and more personalized experiences that we are consumers are increasingly demanding from our favorite brands and retailers.
PS: ArganoUV is one of the world’s leading Salesforce Commerce Cloud development & strategy teams. Contact us to see how we can work together.
