Companies must boost digital presence ahead of ecommerce grocery boom

By Elizabeth Crawford

- Last updated on GMT

Companies must boost digital presence ahead of ecommerce grocery boom

Related tags Amazon

Even though ecommerce represents only a small fraction of grocery sales currently, manufacturers and retailers need to embrace digital now or else risk losing out given it influences more than half of all grocery sales somewhere along the path to purchase, according to new research from Deloitte. 

“Many of today’s consumers enjoy grocery shopping and are using their smartphones, tablets and other connected devices to make their shopping experience convenient and integrated with their daily lives. In fact, digital now permeates the entire path to purchase,”​ the research firm says in the new report The Grocery Digital Divide.

For example, it notes, 80% of shoppers have used digital devices to browse or research grocery products, and their in-store use of the technology has increased from 33% to 51% over the course of 2016.

But just because consumers are using digital more to buy groceries, doesn’t mean they are happy with the tools and resources available to them from manufacturers and retailers. In fact, Deloitte found only 33% of consumers believe that digital in its current state makes grocery shopping easier, compared to 42% across other retail categories.

This gap could translate to CPG companies and retailers “potentially leaving money on the table,”​ given that  33% of digitally influenced consumers in 2015 said they spent more money across all categories – up from 22% the prior year.

“Digital’s continued rise in influence can present substantial opportunities … to further increase consumer spend if they can quickly adapt their business models and build capabilities to deliver on the new digital imperative,”​ the report concludes.

To do this the grocery industry – including retailers and manufacturers alike – likely must undergo a “two-fold transformation,”​ Deloitte says.

First, manufacturers must transform how they operate daily to be faster, more granular and more connected with digitally involved consumers, it says.

Specifically, it recommends they “more quickly sense and respond to consumer shifts when they happen along the path to purchase to capture incremental brand impression and sales opportunities.”

This likes will require tapping IT to build a data strategy that allows sales and marketing to better track changing consumer preferences and react “at the speed of digital,”​ the report says.

To become more granular, companies must engage with consumers based on their personal prefernces and buying habits, the report says.

It adds that companies can become more connected with consumers across digital and physical channels by creating two-way communication both in store and online so that consumers feel heard and catered to, it says.

Teamwork makes the dream work

The second part of the transformation involves “integrating and coordinating across their functional silos to align with a converged world where consumers can shop at any given moment,”​ the report argues.

To do this, the report suggests that CPG manufacturers review retail partners strategies to ensure “alignment with their omnichannel growth plans.”

An example of a manufacturer and retailer that did this well recently is 7-Eleven and Mondelez when they launched a joint in-store and online campaign to support Sour Patch Kids flavored Slurpees. For example, 7-Eleven offered a free Slurpee to anyone who used its app. Mondelez spread the word of the offer through its social media campaigns

Similarly, Quaker Oat’s March 2016 debut of an Amazon Alexa app that helped consumers find recipes for overnight oats not only positioned the brand as a frontrunner in tech adoption, but it set itself up to capitalize on consumers embracing Amazon as a way to buy groceries, according to Deloitte.

Companies that embrace strategies and cooperation like these examples will “find themselves winning both market and mind share,”​ while those that don’t “may go home hungry,”​ the report concludes.

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