Across all sectors, online shopping has changed the way Americans shop for food. A recent report from criteo details some interesting changes and trends in e-grocery, providing interesting insights into a rapidly changing e-commerce landscape. Here are some of the highlights of the report.
Status Quo Persistence
An interesting consequence of the prevalence of e-commerce is that it’s very difficult to unseat category leaders from the top of the search rankings. That means that it’s much easier for brands who lead in their categories to stay leaders, because search for other brands in the category actually reinforces brand awareness for the leader.
The Strength of Mobile Is Very Real
The rise in mobile purchasing is both an opportunity and a challenge for e-grocers: a challenge because the ‘real estate’ of the online shopping experience is limited by the size of the screen; an opportunity because mobile purchasing rates are rising quickly, overtaking desktop and laptop shopping for the first time this season.
The Online Shopping Process is Consumer-Driven
Supermarket layouts have been painstakingly crafted to make you buy stuff. End caps and cash register displays don’t exist in the online shopping experience, so it’s an open question how marketers can tap into this lucrative shopping habit. One mind-blowing factoid about impulse buys: 46% of baby care purchases are made on impulse. This means product recommendations and site merchandising are more important than ever.
Even for the Giants, Fulfillment and Delivery Expense Is a Challenge
Even the mighty Amazon hasn’t cracked the challenge of fulfilling and delivering fresh food orders in a cost-effective manner. Retailers just haven’t quite figured out how to send fresh food to customers in a timely fashion at a price they will pay that is profitable for the company. Hence the strength of the companies who are a combination online and brick-and-mortar.
“Bricks and Clicks” Retailers Have an Edge Over Online-Only
There was a time when e-commerce had everyone talking about the death of brick-and-mortar retail. However, the criteo report points out an interesting dynamic: grocery services that have both an online presence and a brick-and-mortar footprint have a marked advantage over online-only services, because of the cost efficiencies of warehousing and distribution enabled by a physical footprint. Some online retailers have clever ways of overcoming this paradigm by working directly with the manufacturer (Thrive Market).
E-grocery is a different breed from other e-commerce models, with its unique set of opportunities and challenges. Reading this report made some lightbulbs go off for our team as we thought about the e-grocery landscape and how it’s both changing, and being changed by, consumer habits and preferences. We hope you got as much out of it as we did!