Traditional grocers can stand up to Amazon
AmazonFresh, Instacart, and Google Express have all thrived on a simple concept: why go to the store when the store can come to you? Now two grocery megabrands, Costco and Kroger, have teamed up with online delivery companies.
As online and offline experience merge, is partnering with a digital giant the only way brick-and-mortar grocery stores can survive? Social commerce solution company, Bazaarvoice, argues that good old-fashioned grocers have more power than they think, and the battle to fill shopping carts is not over.
Modern vs. forward-thinking
As customers increasingly turn to online grocery services, many grocers have jumped into digital partnerships with the panicked goal of not falling behind.
On the surface, these companies may seem ahead of the game.
Companies like Costco and Kroger are handing off their shoppers to online delivery companies based on the assumption they can’t survive on their own, even though they have billions in revenue that could be used for independent innovation. Letting delivery companies latch on is how they intend to adapt.
Not exactly symbiotic
You can’t truly adapt if you’re co-dependent on another powerful entity, and you certainly can’t thrive. Companies like Amazon and Walmart function like parasites, feeding on grocers’ hard-earned customer bases and growing ever stronger: Amazon is projected to have 26% of market share this year, and Walmart is estimated to capture 15%.
The big guy doesn’t have to win
Although they may not realize it, grocers have advantages the digital behemoths do not: physical real estate and loyal customers with established shopping habits.
These advantages, when paired with a carefully planned ecommerce solution, could make for a more powerful digital grocery system than any that exist today.
So how did Amazon and Walmart get so much control so fast? Bazaarvoice attributes their success to two key steps.
Think like your customer
Amazon and Walmart are experienced in the consumer goods space, to say the least. Both approached the online grocery frontier knowing precisely what their customers wanted and how to win them online. So what do customers want?
Reliable information: Upon entering a store, consumers are faced with thousands of options–47,000 on average, compared to less than 9000 a decade ago.
Customers not only have more choices, they have more refined preferences, too.
Customers today care about health, wellness, and sustainability, making accurate information even more crucial. How do they know what information to trust? They consult the most credible source: other customers. Reviews and forums are full of unbiased information and real experiences that customers use to make purchasing decisions.
Seamless experiences: In general, customers don’t sit at home doing extensive research before heading to the grocery store. They often don’t know what they want to know about until they’re standing in front of it: 82% of consumers look up products in-aisle before buying them.
They want information and they want it immediately.
When grocers are equipped with product information and consumer reviews, ratings, and photos on their website or mobile app, the gap between “I want to know” and “I want to buy” narrows substantially. Customers demand seamless omnichannel experiences and instant access to rich information, and will abandon a brand who cannot provide this.
Let go of tradition
Many traditional grocers are hesitant to transition into e-Commerce, arguing their average customer is a demographic that doesn’t go online. Here’s the thing: millennials are not the only ones active online. Older folks with lower incomes actually make up a large portion of online food sales.
Tradition is great, but it’s not always the most convenient.
As the world changes, consumer behaviors change accordingly, and to win them over, grocers must change their own behaviors. These days, everyone from teenage boys to soccer moms to bingo champion grandfathers expect speed and convenience at every turn.
In the grocery world, that means the ability to buy groceries online and pick them up in-store.
This is a very simple way to improve the omnichannel shopping experience, yet many grocers have not embraced it. Walmart and Amazon both offer this “click-and-collect” option because they understand that crowded aisles, long lines, and out-of-stock items piss everyone off, regardless of their demographic.
The bottom line
The power is not in the hands of the online delivery companies. Nor is it in the hands of traditional grocers.
[clickToTweet tweet=”The power lies with the customer & whoever can satisfy the customer will become the grocery leader.” quote=”The power lies with the customer and whoever can satisfy the customer will become the industry leader.”]
Traditional grocers need to think beyond the brick-and-mortar surrounding their goods and take responsibility for their own online presence rather than outsourcing it to some other company. The shopping industry is in flux and traditional grocers are perfectly capable of reclaiming their spot at the top. They already have the customer base, they just need to tap into its power.