Focus on the Future for Online Happiness

The Lempert Report
December 12, 2014

For grocery stores looking to boost their online presence, think long term for better success.

With the growing number of online shopping options such as Amazon and Amazon Fresh, the pressure remains for supermarkets to boost their own online presence. According to IBIS World data cited by Citigroup,  online grocery sales of about $6 billion in 2013 could advance 9.5% annually to $9.4 billion in 2017 – more than tripling the 3.0% yearly sales growth of the 2008-2013 period.   But as more supermarkets find ways to execute the online service we wonder; how deeply are they looking beyond their immediate desire to fend off competitors? 

Are they building an online presence that will make sense longterm? How profitable? How much loyalty? How might it affect store image, store size, assortments and operations?

UPS recently issued research, "Pulse of the Online Shopper: A Customer Experience Study", which could help food retailers sense what’s ahead in customer preferences and behaviors. For example, UPS notifies retailers of the challenges they face in satisfying today’s “flex shopper…[who] is ruthlessly efficient, switching channels and devices to best suit personal convenience when evaluating and purchasing products. Information and control are paramount, and retailers must offer near-perfect shopping experiences across every channel and device to thrive.”
Other interesting notes from the report are:

•81% feel free shipping is important. To qualify for it, 93% take some action, such as adding more items to the cart or choosing a slower transit time. 

• Just 50% say returns are easy, and retailer policies are clear. And, 82% like being able to return items to the store or ship back using a free pre-paid label.

•Efficiency matters. 43% of consumers start their product searches at retailers (18% browse the site of a favorite store, 18% visit the physical store, 7% view circulars and catalogs)

•More than half of Millennials and one-third of all consumers say social media influence their purchases.

Supermarkets need to remember the long term and how their online service could effect their retail enterprise.