Grocery Online Ordering and Delivery Challenges Addressed
Grocery Online Ordering and Delivery Challenges Addressed
Grocers have been caught up in a marketing crucible - defined by Webster as a '...situation in which concentrated forces interact to cause or influence change or development'. Many of your loyal customers know grocery delivery is available - and they will get it somewhere. This grocery 'climate change' is truly caused by humans who want what they want - delivery. The delivery networks are taking grocers down the wrong path of responding by hiring third party deliverers that only serve to 'un-brand’ you to those current customers who are most loyal and move them to the delivery and online ordering brand.
Furthermore, due to the increased expense for delivery, and the higher average sale, those customers are the most economically viable. Plus, an entirely new generation of customers are gravitating to new grocers because they offer online ordering and delivery.
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The Correct Path:
I refer you to McKinley Marketing Partners (see LINK) who summed up the three best practices for such a crucible to this industry upheaval with input from a variety of industries that have propelled companies through slumps, downturns, and reorganizations, in this abbreviation of their linked article (below, right and numbered):
- Nurture Existing Customers.
When business becomes unstable, some marketers try to right the ship with a focus on generating new business, but nurturing existing customers is just as critical. These loyal customers help establish your brand’s resilience. A strong foundation of return customers enables your company to absorb any blows it takes during an unstable period...
- Ask your Customers for Help.
In addition to nurturing your current customer base, you should tap them as a marketing resource. By gauging their perception of the market conditions and your company’s existing products and services, you could uncover new strategies for growth...(ask customers to try your online ordering?)
- Embrace Flexibility and Resilience.
It’s important to have a team of marketers who can maintain performance and morale regardless of market or company conditions....
How Did This Happen?
In past eras the grocery industry innovated by growing distribution through milk boxes, ice boxes and the complexity of product and service expansion, because the consumer was fast to react on their own to new technologies by buying refrigerators, automobiles and now via online ordering. Local pizza places - then full serve restaurants – eventually went from dine-in only to pick-up, and then to delivery, and it was upstart delivery and online ordering networks with multi-billion dollar capitalizations that upended the market. They put their foot in the door because they fulfilled both the technology issues with online ordering and with gig economy delivery apps. The grocery market is now seeing the same movement, only it is a lot more complicated with refrigerated and frozen delivery and orders that take 45 minutes vs only a few minutes for a prepared food order (it's a lot easier to maintain heat than cold, and pulling a pizza from an oven vs walking a dozen aisles, cases and departments is a lot quicker).
The ‘Change’ is Here to Stay.
These changes are happening in literally every industry and the winners will see this as an opportunity to steal market share they would normally never succeed at so easily - all for the sake of online ordering and delivery - the product mix and service and local value melts away. Consumers can't help it: they're overworked, over-stressed, understaffed at home - just like you - and need a break.
Let's not forget that ordering online with delivery adds costs that poorer consumers won't be able to handle, so this is more about a more economically viable customer. All the surveys say “it’s going to get worse”, because, and according to the experts at Nielson, etc. (LINK), more than half of consumers want to order grocery delivery online, which is where the pizza industry is currently, and the rest of the food industry is headed.
What Next – Adjust Carefully.
So, the perception that a fast adoption of “whatever it takes” means local restaurants and now grocery stores are paying a high price to third parties who take the order by smart device and then make the delivery, at a cost to both ends of the chain - the consumer and the food purveyor. Well, deliverers picking a grocery order have an entirely different task than picking a pizza and salad order, and labor costs and logistics are vastly different, so the delivery networks are going through a re-shuffling for that reason.
Those well-branded third parties how have a piece of the consumer loyalty; wrestled from grocers with local history and investment, and they want more. Local grocers may specialize and have share-of-mind, but a majority of consumers don't care about loyalty any more. Now what? Breaking this chain is difficult but restaurant chains like Panera have succeeded and grocers Kroger, Walmart, Whole Foods and other majors are pursuing solutions, as can local grocers. We don't presume to know much more, except these ten facts our experiences have taught us, which are that:
- Food delivery controls future local restaurant survival and growth and will also do so with grocers, depending upon how grocers react.
- Consumers are going to have to pony up with more than 5 or 6 bucks to pay for the delivery they demand.
- Local grocers can actually benefit and grow if they meet the challenge (Google Wegmans)
- Grocers can't take on the responsibility of risks and absorb all the costs associated with delivery, spoilage or inappropriate deliverer behaviors, such as seeking tips, for one.
- In-house delivery success is going to require an economy of scale currently not available, so adjustments and innovation are inevitable, even if it includes some third party solutions.
- Grocers can ill afford the slippery slope of third party branding for the sole human contact of a deliverer for a grocery order.
- No one single solution exists, and online ordering may not be absolutely necessary for delivery to succeed.
- Grocers need third party help to meet the need, that won’t interfere with the grocer/consumer relationship.
- Solutions have to be affordable, reliable, secure and integrate easily.
- It's the demand of the most economically viable customers, with the highest and most repetitive order value that have the resources to participate, that need to be satisfied first and foremost.
McKinley Marketing LINK - (https://mckinleymarketingpartners.com/2015/06/marketing-effectively-during-an-industry-upheaval/)
The author of the article, Jim Simpson, is a 64 year old independent marketing professional who has worked with Dupont, Sears Home Services, grocers and restaurants, as a licensed wholesale agent for financial service markets - and more - and has more than 10 years working in mobile and web marketing, social media, online ordering, and is now launching a start-up called PorchBoxDrop to assist grocers with online delivery strategies and logistics. For more news, facts and industry information on this subject see his blog at https://porchboxdrop.com/blogs/news and subscribe.