Grocery E-Commerce Set to Surge

Although the overwhelming majority of grocery shopping currently takes place in physical stores, experts suggest this pattern will change in the next decade, as grocery e-commerce is poised to boom in the next decade.

In the U.S., online grocery shopping could grow five-fold to $100 billion by 2025, according to new research by Food Marketing Institute and Nielsen.[i] Online grocery spending could grow from 4% in 2016 of total U.S. food and beverage sales ($20.5 billion) to as much as a 20% share ($100 billion).[ii]

Currently, a quarter of American households buy some groceries online, up from 19% in 2014, and more than 70% will embrace online food shopping within 10 years. Among consumers who say they will buy groceries using e-commerce, 60% expect to spend a quarter of their food dollars online in 10 years.[iii]

The Amazon Effect
Compared to other countries, the U.S. lags in online grocery shopping because Americans’ online shopping expectations have been set by Amazon, according to experts. U.S. consumers see online shopping as a way to buy individual items rather than baskets of goods on a regular basis.[iv]

Amazon’s disruptive approach to grocery includes a click-and-collect offering. Amazon will soon open 4 stores in Seattle and Silicon Valley where customers can pick up online grocery orders within a 15-minute to 2-hour time window. Customers can also order products in-store using electronic tablets, then wait in a “retail room” while their orders are filled.

In addition, the e-commerce giant offers Amazon Go’s checkout-free grocery shopping and Amazon Prime’s e-commerce membership platform, which includes private label groceries.[v]

Despite consumer behavior shaped by Amazon’s e-commerce dominance, the U.S. market is poised for massive growth. Experts say U.S. online grocery sales jumped 157% in 2016.[vi]

Global E-Grocery Trends
The top market for grocery e-commerce is South Korea, where online sales account for 16.6% of the fast-moving consumer goods (FMCG) market. The top 10 markets and their estimated e-commerce share of the FMCG market are:

  1. South Korea, 16.6%
  2. Japan, 7.2%
  3. United Kingdom, 6.9%
  4. France, 5.3%
  5. Taiwan, 5.2%
  6. China, 4.2%
  7. Czech Republic, 2.1%
  8. Spain, 1.7%
  9. Netherlands, 1.7%
  10. United States, 1.4%[vii]


Shoppers Embrace Grocery E-Commerce

More than any other cohort, millennial shoppers are more willing to buy groceries online. Tech-savvy millennial shoppers seem to appreciate the convenience of retailers’ delivery and click-and-collect – buy online and pick up in store – service.[viii]

A new study by Clavis Insight shows 66% of millennials now shop online weekly for groceries. In addition, 69% of millennials purchase health and wellness products online at least once a month, and 25% make weekly purchases of pet food online.[ix]

Mobile Marketing Matters

To attract millennial shoppers, grocery retailers need to offer a seamless mobile-friendly experience, as more than 40% of millennials primarily use a mobile device for shopping.[x]

In general, 3 in 5 grocery shoppers today are looking for sales or coupons on their mobile devices before entering the store and half will use mobile apps to shop at the store.[xi]

The Business Case for Grocery E-Commerce
Shoppers generally spend more per visit when grocery shopping online than they do during a trip to a physical store. In the U.K., for example, the average online purchase is $59 compared with $15 in-store.[xii]

Consumer loyalty adds to the business case for grocery e-commerce. Kantar Worldpanel data also shows that 55% of online grocery shoppers have entrenched habits. These shoppers repeatedly buy the same brands from the same merchants.[xiii]

To compete effectively, retailers will prepare to offer online shopping. Research predicts that center store product categories, including canned goods, condiments and spices will shift faster to online than perimeter categories, like fresh produce and meats.[xiv] Consider starting small with center store categories and adding more items over time.

How to Prepare for Online Grocery Sales
Use competitive data to better understand consumer trends. For instance, Intelligence Node’s competitive data includes these insights for the UK grocery market comparing November 2016 to December 2016, where:

Competitive insights:

  • Tesco had a 78% decrease in total number of unique brands in the Bakery products category in December compared to November
  • Tesco had the most number of products that were out of stock across the food and grocery sector.
  • ASDA increased their assortment size for the drinks category by 14% in December
  • ASDA had the highest Private Label SKU count for the entire grocery catalogue. Its private label SKU count was twice of Tesco’s private label SKU count
  • 90% of the promoted products were in stock across all categories

Category insights:

  • Frozen food: In December there was an overall decrease of out of stock items by 36% in the frozen food category, and Sainsbury had the least out of stocks
  • Wine: For the wines category there was an average increase of 25% in-stock items in December 2016 compared to November 2016
  • Frozen Food, Bakery and Fresh Food were the top trending products in December

Create a strategy based on the competitive analytics and insights, including how these trends relate to shoppers’ online behavior and willingness to use e-commerce for grocery.

Integrate grocery e-commerce into your value proposition, including the convenience and time savings of click and collect programs and home delivery. Work with your suppliers to uncover ways to keep the supply chain cost-effective and responsive to changing consumer needs. By planning ahead now, your company will be well-positioned to capitalize on the imminent growth in grocery e-commerce.

Intelligence helps brands and retailers make decisions about the right trends of any product across the globe., at the right time. If you’d like to see how we do that, talk to us today.

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[i] Daniels, Jeff. Online grocery sales set to surge, grabbing 20 percent of market by 2025. CNBC. January 30, 2017.
[ii] Ibid.
[iii]Ibid.
[iv]Melton, James. Online grocery sales top $48 billion worldwide. Internet Retailer. October 6, 2016.
[v] Wells, Jeff. Amazon strikes again: E-commerce giant to open click-and-collect groceries. Food Dive. February 24, 2017.
[vi] Melton, James. Online grocery sales top $48 billion worldwide. Internet Retailer. October 6, 2016.
[vii] Ibid.
[viii] Daniels, Jeff. Online grocery sales set to surge, grabbing 20 percent of market by 2025. CNBC. January 30, 2017.
[ix] Loria, Keith. Most millennials grocery shop online. Here’s how to get them into stores. Food Dive. February 24, 2017.
[x]Ibid.
[xi]Daniels, Jeff. Online grocery sales set to surge, grabbing 20 percent of market by 2025. CNBC. January 30, 2017.
[xii]Melton, James. Online grocery sales top $48 billion worldwide. Internet Retailer. October 6, 2016.
[xiii] Ibid.
[xiv] Daniels, Jeff. Online grocery sales set to surge, grabbing 20 percent of market by 2025. CNBC. January 30, 2017.

 

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The Quick And Easy Guide To Retail Management Systems

“The customer is the king.” This is the motto of every retailer today, and for a good reason.

It’s every retailer’s responsibility to ensure the customer is more than just satisfied with their shopping experience in order to retain and draw new customers. With this attempt, retailers are now extending retail management beyond their products, by taking into account the busy lifestyles of customers and providing services.

What Is Retail Management System?

The process of amplifying sales and customer satisfaction through a better understanding of consumers, products, and services with respect to a specific company is termed as retail management.

The strategy of typical retail management systems is to research the retail process from the manufacture of the product, its distribution among retailers, and finally the customer feedback. It includes several steps to procure the necessary details. Ideal retail management systems should ensure the customer is satisfied with his/her shopping experience and should be able to shop with no difficulty. It gives the customer the convenience to locate the product easily, save time, and be satisfied with the overall shopping experience.

Now that you know “What is Retail management system?”, let’s take a quick look at why you need retail management systems.

  • Retail management helps keep the store organized. So if a customer comes to you looking for a particular product, you can easily guide them to it. You can do this by grouping similar products according to the age group, gender, and frequency at which the item would be bought. Labels also can come in handy to achieve this. Also, ensure there is ample stock of products and that the customer must not be kept waiting for too long.
  • The other important necessity for retail management systems is to keep a track of the products and their sales and prevent shoplifting. This can be done by simply assigning a unique SKU to each product, which makes it easy to identify and track the item. Additional measures like CCTV surveillance can also be helpful.

What To Look For In Retail Management Systems

The essential set of digital applications that help make the retail management process easier and help run your business through smooth operations are called retail management systems. Here are seven of those features that can help you get the most of retail management systems, by enhancing customer experience along with your profit margin.

A typical retail management system would be comprised of a Point Of Sale (POS), Customer Relationship Management (CRM), Sales Order Management, Purchasing and Receiving, Inventory Management, Reporting, and Dashboard applications.

Here are six features to keep in mind when considering retail management systems for your retail outlets:

  • Platforms For Convenience

Ideally, retail management systems must help customers with mobility. In a world dependent highly on smartphones and computers, it is essential that the customer should be able to look up the inventory right from home, at his/her convenience. An e-commerce store also helps promote sales to a large extent. A good retail system should be enabled with plug-ins that help you launch an e-commerce store without any hassle.

  • Optimizing Through Dashboards

A dashboard is a graphical summary of various important information put together in order to have a quick overview of the necessary aspects of a business. With the help of a dashboard, you can analyze the retail management in a simple manner and optimize inventory, staffing, and even trading through real-time operations.

  • Offering Loyalty Programs

Customers are attracted to loyalty programs and rewards on their shopping. Typical retail management systems help administer rewards to customers, while also keeping track of the points earned and redemption of points by each customer.

  • Cross-selling And Upselling

Cross-selling, in plain words, is when you encourage a customer to buy complementary or similar products after looking at his/her purchases. Upselling is when you encourage a customer to buy the same product from a better brand and upscale their convenience along with your sales. Ideal retail management systems can keep a track and group similar products, which helps the sales representatives make the necessary recommendations to customers during transactions. This not only boosts your revenue but also enhances customer satisfaction.

  • Flexibility Of Payment

A good retail management system gives the customer the convenience of payment through several modes—cash, card, gift vouchers, and digital applications.

  • Promotions

Making use of multi-item promotions allows retailers to set their own prices for customers with the information gathered from their shopping history and current purchases.

Inventory Management Software

An inventory management software is a set of business applications that keep a record of the product sales, material purchases, and a number of other production processes, while also helping optimize and manage these processes. The main aim of this software is to lower the time and efforts spent on basic product tracking and use the same resources in enhancing the efficiency of the system.

Inventory management software helps keep track of their products through barcodes and radio-frequency identification (RFID).

Benefits Of Using An Integrated Management System

An integrated management system, much like an inventory management system, focuses on integrating all of an organization’s systems into a single framework that can be used by the involved members for various functions and at several levels.

Some of the important and basic advantages of using an integrated management system in retail management are:

  • Increased efficiency
  • Cost reduction
  • Maintaining a balance between the various practices
  • Reduction in duplication of efforts
  • Elimination of conflicting responsibilities
  • Maintaining consistency in performance
  • Enhanced communication internally and externally
  • Making business goals the prime focus
  • Making it possible to have awareness and training programs for enhanced efficiency

By inculcating retail management systems into your business processes, you can not only amplify the efficiency and quality of your retail service but also simplify the process and divert your time and efforts into achieving bigger goals for your organization. With the bonus of enhanced customer satisfaction, you can raise the threshold for your profit margin and provide better services to your customers. Ensure you look for a system that takes into consideration all the needs of your retail outlet as well as your customer to provide that top-notch shopping experience.

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Marketing your product online isn’t what it used to be. In fact, it has gotten a whole lot more difficult to get consumers to notice your business among all the competition. Without a sound marketing strategy to guide you, you’re certain to face an uphill battle simply to establish long-term customer relationships. Yet, hope is not all lost when it comes to reaching your target audience. There are still a few tips and tricks that could help you connect with consumers. Here are a few ways you can effectively market your product. Continue reading “8 Best Ways to Market Your Product Online”

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