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

Click to Get Full UK Grocery Report

 

 

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.

———————————————————————————————————————————–
[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.

 

5 Things You Need to Know About the New Mobile Shopify App

If you think your brand’s reputation speaks for itself, that you can rely on traditional marketing strategies and neglect the burgeoning world of mobile shopping, you’re dreaming. Shopify may be the biggest thing to happen to retail since online shopping and credit cards. The new mobile Shopify app can supercharge your sales. Think it’s not for you? Think again. Continue reading “5 Things You Need to Know About the New Mobile Shopify App”

Ecommerce Holiday Shopping Predictions for 2016

As retailers continue to lament the nosedive retail sales have taken, eCommerce is a bright spot amid an increasingly bleak retail outlook. Sales are notoriously difficult to predict, especially online, but 2015 can teach us much about what to expect in 2016. Make sure your brand is ready for the season with these 2016 eCommerce holiday shopping predictions.

Online Sales Are Booming

Online sales are growing like never before. In 2015, eCommerce grew by more than 13%. On Cyber Monday alone, consumers shelled out more than $3 billion. And retailers who think that only brick and mortar stores benefit from Black Friday should think again. Consumers spent $2.74 billion on Black Friday in 2015.

Consumers appreciate the convenience and privacy of online shopping. They don’t have to deal with pushy sales representatives, can spend hours curating the perfect shopping cart, and don’t have to fight lines or traffic. For your business to capitalize on these preferences, you need to make the eCommerce sales process as seamless and stress-free as possible. That demands an optimized site, clear pricing, and detailed information about each of your products. A helpful live chat can close the customer service gap, and may even close the deal on a few extra purchases.

Consumers Buy for Themselves, Too

Ecommerce retailers who market only giftable products make a potentially fatal error. Consumers shop for themselves during the season of frenzied purchasing, spending an average of $139. Use this trend to your advantage by offering a variety of sales, including on items that customers typically only purchase for themselves. Because consumers often purchase gifts that they’d like to receive themselves, buy one get one deals can be especially profitable. Consider also offering gift certificates or discounts on a future purchase to customers who shop during the holidays. This is an investment in future sales that can help you start 2017 on a high note.

Discounts Are Waning

Big box retailers entered the 2015 holidays season with leaner inventories than in previous years. That trend may continue in 2016. This means that retailers have fewer incentives to offer major promotions since they don’t need to offload lots of inventory.

This means that businesses which offer incredible sales may pull consumers away from big box retailers. It also means that your sales might not have to be as big as you think to get the attention of customers. No matter what eCommerce pricing strategy you use, make sure to build excitement in the weeks leading up to a sale. Customers can’t participate in sales they don’t know about.

Some Days Are Bigger Than Others

Cyber Monday and Black Friday are the perennial favorites of discount-hungry consumers, but they’re not the only big shopping days. Plan your sales around other popular days and watch the business flood in. A Google Analytics study points to the shopping days on which ads most often lead to purchases. Those are:

  • The second Monday in December (December 12th in 2016)
  • The second Tuesday in December (December 13th in 2016)
  • The third Monday in December (December 19th in 2016)

Since your ads are more likely to translate into conversions on these days, plan a more aggressive marketing strategy, and don’t shy away from spending a little extra cash.

Mobile Shopping is Big

Consumers are increasingly shopping on mobile devices. If your site isn’t optimized for mobile, if your apps don’t work well, or if product descriptions disappear on your site’s mobile page, you’re losing business for no good reason.

Consumers often build a shopping cart on their desktop, then buy on the go. And sometimes they curate their cart on the go, then purchase at home. Ensure your site can easily switch between mobile and a desktop by making it easy for customers to set up an account that saves their cart.

Shopping Lasts Longer Than You Think

Very few consumers finish their holiday shopping on Black Friday or Cyber Monday. Indeed, many continue a shopping spree well into the new year. Accommodate this trend by continuing sales after the holiday, and offering incentives for consumers who want to return purchases or buy something for themselves.

People Purchase an Idea

The advent of sites such as Pinterest make it clear that consumers aren’t just purchasing objects. They’re purchasing ideas, and often entire lifestyles. You will make more sales if your products fit neatly into consumers’ dreams for their lives. Selling products that work well together — shoes and bags with the same print, a bookshelf that matches a baby crib — helps consumers envision how a product will work in real life. It also makes your products ripe for use on sites such as Pinterest, where a wider audience with a large disposable income may see them.

Last-Minute Shopping and Fast Delivery

The advent of free or cheap overnight delivery on sites such as Amazon means that more consumers are waiting till the last minute to make their purchases. Compete with these sites by shipping items quickly and offering affordable last-minute shipping. Retailers that delay shipping for days, that don’t provide tracking, or that routinely deliver items later than promised stand to lose out in an increasingly competitive market. Consumers want their merchandise now, and if they have to wait, they’ll go somewhere else.

Retail pricing ebook CTA

Model vs. Mannequin: Which Produces More Sales?

A model can make even a lackluster piece of clothing look gorgeous by highlighting its silhouette, showing how the garment fits with other pieces, and encouraging an aspirational approach to buying. Of course, almost no one can afford the best models, and few small business owners can afford professionals. This leaves most businesses to choose between mannequins (or other displays, such as fancy hangers) and amateur or part-time models. Continue reading “Model vs. Mannequin: Which Produces More Sales?”

10 Secrets to Success with Shopify

In just the past few years, the eCommerce space has developed by such leaps and bounds that online retailers now have countless tools at their disposal to streamline the process for consumers, allowing them to remain competitive in the face of a wildly growing industry. Among the most popular resources for eCommerce sites is Shopify.

Since its founding in 2004, the company has created increasingly sophisticated software designed specifically with online retailers in mind. It’s a tremendous tool that more eCommerce businesses should be utilizing to strengthen their products’ reach. Continue reading “10 Secrets to Success with Shopify”

Riding the Back-To-School Wave to Retail Success

Anyone who’s been in the retail business knows how important capitalizing on the shopping wave during the back-to-school, or BTS, season is. Depending upon which expert you ask, this potential boom in sales is the 2nd, or 3rd, biggest one during a calendar year.

As summer camps draw to an end, parents start a frenzy of last-minute shopping for school, which, combined with back-to-college shopping, translates to a whopping $68 billion spent. This means that merchandising and marketing strategies, and the ever-important multi-channel shopping experience at retails chain, all need to be tweaked.

Let’s take a closer look and delve deeper into seasonal retailer and e-tailer techniques for riding the back-to-school wave, and what exactly BTS and BTC mean for retailers.

Understanding the Significance of Back-to-School Shopping

The BTS season is a little different from the boost in sales during ‘normal’ holiday seasons. In a nutshell, it’s longer than these other ‘boosted sales’ periods.

Parents may begin their research on products, prices, and promotional offers — usually online — as early as July. They compare the collected data and make their decisions by the month of August, making the purchase around the same period. Last-minute frazzled trips are usually done and dusted by September. This means that retailers have a longer window of potential sales compared to other big sales days, such as (say) Black Friday.

Products that receive a boost during the BTS shopping window include office supplies, apparel, electronics, and books. This long list of products, and the relatively longer sales window, make strategies a little more complicated during the BTS season.

Brick-And-Mortar Stores Rejoice!

As more and more e-tailers take over territory originally occupied by brick-and-mortar retail outlets, you could be forgiven for assuming that retail stores won’t be doing much business. To the contrary, though, it’s these stores that will see more traffic than their online counterparts. While parents will head to their laptops to buy devices and wearables for their kids, all other purchases will get them walking into brick-and-mortar stores.

School supplies such as notebooks, textbooks, and writing materials drive parents to stores, with kids in tow. Stores are the primary choice for parents buying writing materials and books (87%). These are followed — in terms of brick-and-mortar store demand — by shoes (80%), jewelry and accessories (64%), and clothes (64%).

Even as store-based retailers gear up for wars with e-tailers during the upcoming holiday season, they are set to receive a boost in sales from BTS parents.

It’s easy to see why: parents need to shop with their kids to accommodate their preferences, and most feel this is best done at a store, rather than online.

Tailoring Your Strategies Accordingly

Since we’ve already discussed the massive potential of this season, let’s take a look at marketing — and merchandising — strategies designed to help you achieve optimal returns.

First, you’ll need to understand that customers are primarily concerned with who offers the best deals. As a retailer, your first priority would be to think along those lines, and come up with a strategy that helps you put your brand right there. Even Apple — not a brand known for offering sales — caves in during the BTS season, offering discounted ‘student’ and ‘education’ prices.

Clothing giants such as Urban Outfitters and H&M target children from middle-school through college age with carefully planned ads. Take a closer look at textile e-tailer websites, and you’ll probably see smiling school and college kids, with huge blurbs advertising discounts up to 70%.

Take a look at your competitors, and make sure you stay ahead of the game. Build marketing strategies around the BTS shoppers, and you’ll see your sales numbers rise.

E-Commerce-Specific Strategies, Techniques, and Ideas

With so many consumers spending so much of their time online, the retail industry today — while still relying on in-store interactions — has grown to depend on big data and online transactions.

If you haven’t done so already, it’s time to embrace social media platforms like Facebook, Instagram, Pinterest, and Twitter. In fact, that last tweet-broadcasting platform now has a ‘buy’ button, letting you sell products right off your Twitter timeline. If you aren’t aware of what the ‘Twitter’ timeline is, your brand’s social media game is in need of some serious updates this BTS season.

Seeing as 41% of college-goers base their buying decisions on smartphone-based research, M-commerce is another concept that needs to be embraced in order to ride the BTC wave.

Wherever your potential customers spend their smartphone browsing time is where your brand needs to be front and center. For instance, the humor app ‘9GAG’ had 164 million visitors in December 2015 alone. Considering that most of these users are college students on their phones, this is a great place to advertise.

You can use retail analytics software providers such as Intelligence Node to help you build strategies based on big data and competitor trends.

Embracing concepts like new social media platforms and big data, and understanding the significance of a strategy tailored to buyer trends in the BTS season, you’ll be able to capitalize on the buying trends of parents scurrying to stores with school-going kids close on their heels.

Call to Action button

Breaking Down ABOF’s Bold Entry In India’s Fashion Ecommerce Scene With Data Science

Indian conglomerate Aditya Birla Group launched ABOF on 16th of October’15 and entered a space that is dominated by category specialists Jabong and Myntra. When you consider the fact that Aditya Birla is the largest fashion player in India through Madura Fashion and Pantaloons, which were acquired by it in 1999 and 2012 respectively, its foray in fashion e-commerce seems natural. Plus, it’s hard not to be tempted by the traction ecommerce has been getting with a string of multi-million dollar mergers & acquisitions and VC funding activities over the past few years. According to various estimates for the year 2020 from sources like Goldman Sachs & PwC, the Indian ecommerce market is slated to be worth $60 to $100 billion.

Continue reading “Breaking Down ABOF’s Bold Entry In India’s Fashion Ecommerce Scene With Data Science”

The Reason Why Retail Industries Love Recommendation Engines

Remember seeing the words, ‘you might also like’ while you are shopping on-line? Or the ‘people you may know’ on LinkedIn or Google Plus? How many times have we actually stumbled upon these words and ended up clicking them, just to find out a little something different?

When Big Data is mentioned, ‘benchmarking’ is often mentioned in the same breath. As amazing and accurate as benchmarking with data is, it is not the end all of big data. There is something more to Big Data- that gives it so much more value. It is called a “Recommendation Engine” in industry lingo.

Recommendation is that one step ahead of benchmarking or comparing data. Because, comparing data against your competitors is great from a ‘getting insights’ perspective. The next logical, and often-times undeniably important step, is using those insights productively. A recommendation engine is what turning insights into actions is all about.

Continue reading “The Reason Why Retail Industries Love Recommendation Engines”

Does the Size Chart play an important role in Ecommerce Conversion?

Confused? So are we! Let’s put this into perspective- with ecommerce sales worldwide reaching $1.47 trillion in 2014 alone, we are talking of a HUGE number of people, who log in to shop online everyday!

Research shows that one of the major reasons for products to reach the wishlist but not the shopping cart, is size. In fact, recently consumers regularly shopping online were surveyed, on the parameters of why there are instances when they turn away from purchase- and their answers were, bluntly put, size and payment modes.

Continue reading “Does the Size Chart play an important role in Ecommerce Conversion?”

Valentine’s Day: Why Romance Is A Blessing For Retailers?

The splashes of red and romance in the air- Valentine’s Day is when all and sundry capitalize on love. Love is the music of the soul- at least that is what numerous ads will have us believe. 14 February may fall on any day of the week; but we are prepared for it, even before the month of February begins.

At IntelligenceNODE, we have been looking at the various ways that love is built up into the best commodity there is. And why not! Valentine’s Day is an opportunity for you, the retailer, to gift the carefully crafted dreams of the people, by the people and for the people, to them.

We realize that some of the best deals, the whole year round, are on offer in preparation for or on Valentine’s. To cite an example, this year, the city of Newark sold 100 vacant lots for just $1,000 to couples, with the condition that each couple must build a home on its lot within 18 months and become full-time occupants. We think this was a great deal! And an amazing way to build a community, augment the job market, spread some more love…


newark-land-sale


LOVE IS NOW MOBILE!

Consumers are in the zone these days, where experimenting with different products and ideas has become their new way of life. When it comes to gifting that ‘special someone,’ there is no holding back. Consumers are prepared to buy on impulse and at the last minute. The huge rise of mobile usage and online shopping means that mobile increasingly plays a key role in the path to purchase.

Data collected from a random sample of 500 million online shopping experiences showed that retailers gained up to $35.3 million in incremental revenue and experienced an 11% improvement in average order value the week leading up to Valentine’s Day. Total conversions also increased by 24%. All this circa 2013.It has only increased now!

After all, If the Indian Online Retailer Myntra can contemplate going exclusively mobile…


The trend has been mobile was winning. Now it has WON.

-Eric Schmidt, Google


CAPITAL IS ON CUSTOMER EXPERIENCE OPTIMIZATION

Get personal. Get real. Get recognized. These words seem to be the new mantra. We find that people like to see and feel real- not larger than life- real. And marketers are getting this too. A lot of brands have done just that. Engaging their consumers through the social media- marketers have successfully created product stories.

Be it a cool video series like GAP’s new campaign, where the brand has teamed with The Daniels on GAP’s first Instagram micro-series as part of its Spring “Dress Normal” campaign. Or Hallmark’s #PutYourHeartToPaper Campaign which already has a couple of million views! These ads ensure that conversions happen- online and offline.


https://www.youtube.com/watch?v=Kut17MUKpi4


ONLINE & IN STORE ARE CONNECTED

Valentine’s Day happens to be one of those holidays tied to emotions. So an element of surprise and generosity are the most important aspects that retailers need to keep in mind while designing their marketing strategies.

Creating an amazing and innovative omni -channel experience is the major target for retailers worldwide, on any given day. But even more so on Valentine’s. And this works online as well as in store. In one example, BloomSnap, a feature found on the online flower marketplace BloomNation, allows customers to see the bouquet of flowers they purchased in the form of a photo sent directly from the florist before the bouquet is shipped.


 

bloom-nation


Valentine’s Day is all about love. But these insights we have come across are for the daily as well we think. As a retailer, you are involved in the amazing business of making sure that love is tangible. After all, who needs cupid when we have you? At IntelligenceNODE, we hope to honor this connection through our link with you!