While online shopping for other products becomes ubiquitous, the only sector that has failed to gain ground is the supermarket. During the dotcom boom of the late 90’s, there were sites like Grocery.com that tried and failed. Large offline channels like Safeway and Wal-Mart have entered the e-commerce sector with limited success.
Why has this e-commerce sector not been able to get a lot of traction?
Unlike electronic products, books, sporting goods, pharmaceuticals and even clothes (which have their own challenges), there are disadvantages to web-based delivery of groceries. The biggest is the product and the counter of charcuterie. When it comes to fruits and vegetables, people want to touch and squeeze them according to their preference for maturity and size. As for the deli counter, again, people want to see what cuts of meat, poultry or fish they are getting. Even with the sides of the grocery store.
For an online grocer to overcome this major objection, he / she should ensure that the product and meat are purchased locally to support the current consumer of the “Farmer’s Market” whose mantra is “to know where his food comes from” – movement . In other words, the concept of central warehouse or regional warehouse will not work.
Online grocers for the produce section and the deli counter should be hyper-local, which means they will lose their competitive advantage in terms of economy of scale. Even that may not be enough because you still can not smell and see peach, banana, broccoli, etc. Another concern is the expiry dates for dairy products and other chilled products. Many meticulous consumers carefully check these “sell by deadline” dates. Therefore, another person who chooses these items can be problematic.
Certainly, there will be some segment of the market that will not care about another person choosing their meat products, chilled products and chilled products, provided they have the convenience of delivery and the price . There is another type of consumer who would benefit from online groceries. These are people with reduced mobility, whether it is a handicap or a lack of a vehicle. However, the question is whether these segments are sufficient to monetize the online grocery sector.
In addition, with more and more people living alone today, their minimum weekly shopping list may not be enough for online grocers to offer free delivery. In an increasingly competitive retail environment, both online and offline, reduced profit margins will not reduce them. If the customer has to pay for delivery, depending on the charge, the cost could be limited. One way to solve this problem is to use minimum order quotas to get free shipping. Or with small orders, nominal delivery charges would not be a burden.
The food is different than buying other items online. It’s very personal, subjective, and important for most people to roll hundreds of miles to make those decisions. Although non-perishable packaged goods and even frozen foods may function as a sensitive area of online commerce, if you consume fresh fruits and vegetables and / or deli products, you will have to make two trips to the supermarket. , who defeats the purpose of ordering certain articles online.
Amazon has entered this sector (of course!). If anyone can overcome these obstacles, it’s him with his deep pockets. But they still have only several regional warehouses across the country, which suggests the quality of their products. To go hyper local, meet the changing appetite of the consumer would be very expensive.
Wal-Mart and, to a lesser extent, regional actor Safeway could have an edge in this area as they already have their brick and mortar stores in many areas.
The extent of electronic commerce varies considerably from product to product. Books, electronics, music, movies and office supplies – products that are virtually interchangeable from one retailer to another – sell better online than store-specific items or foods.
Despite the rise in online shopping, the grocery industry has been one of the few sectors to remain largely unaffected, but it is beginning to evolve as companies implement more delivery services in addition to innovations. in their stores. To remain competitive in an increasingly demanding market, companies are looking for benefits, stand out from others and gain a unique market position. Some customers still do not know what they want from online groceries, so companies will have to experiment and ask for feedback before they can have a serious impact on how people buy their products.