Online Grocers: Accelerating out of the turn-2
In my earlier post "Online Grocers: Accelerating out of the turn", I started with how Online Grocers can leverage the trend where shoppers are chasing value. We had also talked about some ideas that could be implemented easily and thereby leverage the trend – in this post we look at a few more ideas...
Idea II- Offer more relevant Promotions and Package Sizes
Today, customers are looking to stretch their dollar and a prime mechanism being seen is eating at home more often
By recommending product pairings and combinations (food + wine + cheese + sides + dessert combinations) to induce customers to explore their offerings as a cheaper yet equally satisfying alternative to eating out is an opportunity that many retailers are successfully exploring. This move to offer value perception is strong in the UK and seen across mid-premium and premium retailers.
Also, customers are today looking to purchase larger packages that are cheaper on a comparison basis. To evolve the online capability and not just merchandise ‘multi saves’ or ‘ value packs’ retailers should analyzing the shopper’s previous shopping pattern and frequency to intelligently suggest / recommend a higher volume package and quantify the savings.
Coupling such offers with a free shipping / reduced price shipping promotion when the cart size exceeds a certain threshold amount can further induce customers to pick up the essentials in larger quantities – a win-win-win approach for the manufacturer, retailer and customer.
Idea III - Minimize the cost of online shopping
Often while product prices are cheapest online, adding in the shipping cost skews the purchase decision in the stores favour. Also delivery delays and inconvenience causes customers to abandon their carts and retailers to lose revenue and goodwill.
This scenario can avoided by offering membership based shipping programs with a low one time sign up fee, that could be waived if the customer shops a significant amount during the year. Besides overcoming the fatigue with shipping charges, this approach also enhances customer loyalty and repeat visits – industry statistics show that customers who sign up for such a program typically shop the online store exponentially more often than customers who haven’t signed up for the program.
More and more grocery retailers are also promoting their ‘order online, pick up in-store’ service as it allows for dual benefits of bringing additional customers into the store –albeit for pickup of previously placed orders - and also keeps the in-store teams consistently engaged at predictable workload levels to pick and pack orders placed online.
An article by Progressive Grocer refers to a Nielsen report that says 20% of shoppers are pro actively managing grocery budgets, and it’s all about value and not low price. Grocers will have to adopt this trend very quickly and leverage it to emerge successful when the things turn around. When things turn around, I think shoppers will remember the value they received than just the low price offers.
We will be discussing a couple more interesting delivery options in a POV that's soon to be published on the same lines. If you would like to receive a preview of the paper, please write to me at Jayanth_Rao01@infosys.com and I’ll send it across to you.
