Online Grocers: Accelerating out of the turn
Loyalties have changed. Customers have migrated to the perceived lowest cost option and now there are news and signs of recovery, amidst caution. Is it time for another shift in loyalties and will such a shift happen as swiftly as it did at the onset of this recession? Times are uncertain and one is not sure if we will be seeing another round of change in shopping patterns and the slowly emerging signs of economic revival add to the uncertainty.
Grocery operators and specifically online grocers, though cannot wait & watch – they will have to be ready to adopt to patterns that customers may choose to follow. Grocers who can do the balancing act between shifting patterns and the pace of change will emerge winners. Kunal (my colleague at Infosys Consulting) and I think there are 3 key trends that can help online grocers to help achieve the balance -
1. Continue to help the customer save money
2. Offer a richer shopping experience
3. Enhance community interaction
In this post, I’ll focus on the trend - “Continue to help the customer save money” – an extension of last year’s mantra at all retailers.
Trend 1 - Continue to help the Customer save Money
Change in customers shopping habits are here to stay and online grocers should consciously continue to create long term value in their offering through specific marketing and merchandising initiatives.
Idea I - Promote private label’s online and induce trials through free sampling
Most retailers today offer a significant range of private label products that are competitively priced in relation to comparable national brands. The ‘brick’ business at retailers are seeing a growth in private label sales from the low to high teens and this market is a great opportunity to gain similar growth for the online business
Leading online grocery retailers in the US and UK are actively beginning to market private labels by increasing in-house brand visibility during the user journey and also displaying prominent indicators against the product listing.
Consistently promoting the competitive pricing and comparable quality of their private label products and simultaneously giving these products due importance in the online assortment – with higher visibility in listings and boosting these products within search results - retailers can ensure customers satisfaction by:
- Building customer loyalty as they return for private label products that cannot be found at other retailers.
- Helping stretch the customer’s budget
- Providing the same or more perceived value at a lower price
Besides increasing the online availability, visibility and ‘search-ability’ of the private label products, simultaneously inducing trials through free sampling will increase private label business in due time whilst gaining customer appreciation and loyalty.
We will discuss more ideas in subsequent posts to strategize “Continue to help the Customer save Money”. Do you have any other ideas on how this trend can be positively used by Grocers?
