Off the Shelf provides a platform for Retailers and Consumer Packaged Goods companies to discuss and gain insights on the pressing problems, trends and solutions.

« October 2014 | Main | January 2015 »

December 29, 2014

Retailers need to re-invent loyalty programs

Loyalty of a customer is a gift for any business. Much has been done to increase the number of loyal customers and maintain the loyalty of the existing customers. It seems like whatever the retailer does, the customer expectations keep increasing. Does it mean that retailers need to forego the existing methods and adopt new methods to enhance customer loyalty? The answer lies in determining how much to re-invent and what to enhance. Customer loyalty is one of the topmost goal that each retailer wants to achieve - as a loyal customer has higher ROI than a normal customer.

Today, retailers run a number of offline and online loyalty programs. Retailers such as GAP and Nordstrom manage their cross-sell and up-sell through loyalty programs

      GAP uses cross-sell opportunities via pop-ups, based on user's online shopping behavior;

      Nordstrom makes it convenient for customers to manage their wish list by allowing customers to:

·         Share their wish list with friends and family through an email and /or find their friends and family's wish list to give gifts they want

·         Save multiple addresses, up to 150 of their favorite items and set privacy settings

·         Nordstrom emails their customers when items in the online shopping bag are about to be removed (reminders are not sent out for wish lists, but emails can be sent to friends and family)

Customer loyalty is managed and maintained by almost all the retailers, but a continuous improvement on their current offerings can be achieved by making the loyalty programs easier to adopt and with higher incentives to the customer. Nordstrom has taken customer loyalty a step further - it has tried to understand its customer better and provide a personalized loyalty program:

  1. Nordstrom's "Loyalty Program" is a service where customers can enroll themselves to avail benefits based on purchasing pattern
  2. A professional services team across the channels is in place to work with customers
  3. A point system is in place to drive traffic

As retailers continue to expand the usage of technology such as LBS (location based service), 'Design for self', bluetooth technology iBeacon, etc., it is clear that such innovative technology would be very helpful in enhancing customer loyalty.

·         LBS services are being used to notify consumers about promotions / offerings in nearby stores. These services need to be more personalized based on customer's buying pattern

·         'Design for self' enables the consumer to customize and design their products online. A few organizations - Nike (Apparel, Accessories) and Toyota (Auto Manufacturer) have empowered their customers to design their products online. Fulfilling each customized requirement may not be an easy task. To begin with, retailers can prioritize the customers based on the number of loyalty points of a customers and delight the customer by fulfilling their customized product

·         Bluetooth technology such as iBeacon is being used to provide contextual promotions to the consumers in store. Based on customer's aisle movement and selection of products, these promotions need to be targeted to enhance customer experience and thus increase customer loyalty

Targeted promotions to loyal customers would result in a higher ROI, but retailers need to keep reminding themselves that their customer has become much more tech savvy. Hence, retailers need to be a step ahead and use latest technology innovations to revamp and enhance their existing loyalty programs.

 

To know more about how you can use various integrated technology innovations to enhance your existing customer loyalty programs, meet our experts at Retail's Big Sow 2015. Schedule a meeting now. Visit www.infy.com/NRF15.

December 22, 2014

Smartphones and Smart Consumers

 

There was a time when if you went to a retail store and the prices seemed a bit high, you would have to drive to a competitor to compare rates.  If it turns out the initial store was cheaper, you could drive on back and make your purchase.  Then the internet came along.  If you wanted to compare prices, you could do some online research comparing different retailers' prices, before printing off your MapQuest directions to the store offering the lowest prices.  Now, we're in the mobile era.  From a retail store you can quickly look up the price of a consumer product offered at every single competitor from your tiny computer that you take everywhere that happens to make a phone call once in a while. 

How do retailers satisfy these knowledgeable consumers?

                Armed with smartphones, consumers demand lower prices and have the power to seek out less expensive alternatives, including buying from online retailers like Amazon.  To compete, many retailers have offered to match the lowest prices from physical and online retail stores alike.  This can prevent a retail store from losing the customer, but a cost.  Retail stores lose revenue by lowering their prices to match low-cost competitors, but they also must deal with the uncertainty in forecasting associated with selling a product at various prices.  Price matching also allows some shrewd bargain hunters room to pull a fast one over retailers.  Recently some customers created false Amazon pages to purchase Playstation 4 consoles at less than 25% of the going rate.

Where does this leave retailers?

                Retailers use this price-matching to practice price discrimination.  They offer lower prices to the bargain-hunters who pull up competitor prices on their iPhones, but offer standard rates to those who are satisfied with the listed price.  This strategy allows retailers to stave off the low prices of online retailers a little bit longer, while also extracting the most revenue from most customers.  Trends are moving in the direction towards consumers gaining more and more information about consumer products value and quality, so physical retail stores must begin to offer more benefits to the in-store experience if they wish to remain profitable.  The Apple Store is the pinnacle of this in-store experience.  Customers enjoy trying out the latest products, receiving one on one assistance from "Geniuses", and lounging around in the sleek-looking stores.  There is still a reason to go to these physical locations.  Price-matching is nice short-term band aid, but retail stores must continue to offer premium experiences if they expect today's consumers to choose in-store purchases over the convenience and experience of online shopping.

December 18, 2014

What can retailers learn from consumers' online behaviors in shaping the in-store shopping experience?

Jane is walking through her local market when she passes by the hair products aisle and she remembers that she's running low on hair gel.  She wants to try a new, higher-end product, but making the selection is daunting, and she is not sure which product to buy.  She wants to do some quick comparison research before she spends 30 dollars on a product, so she takes out her phone to read relevant product reviews.  It takes a while to locate all the products, and reading the many reviews for the various products are overwhelming.  After five minutes of frustrated searches, she decides to settle with her generic option.

For the average shopper today, Jane's experience is likely to be a common one.   Indeed, a recent consumer survey found that the majority of people prefer to begin their journeys online, with 88% of shoppers webrooming--or looking at products online first, before purchasing in-store.  Such practices are not relegated to just high value purchases like electronics alone; modern day digital shoppers are increasingly price and value conscious, and they are used to easy access to reviews during their online shopping experiences, hence they tend to be less impulsive while purchasing, than ever before. 

It is the job of retailers then to meet consumers' increasing demands for external sources of information during their in-store shopping experiences.  To do so, retailers must focus on enhancing capabilities on mobile devices.  For example, to help shoppers like Jane, retailers can attach QR codes to products which allow consumers to easily access reviews for the product by simply scanning it with their phone.  On the same page, there can be reviews for related products as well. Also included must be tools to help Jane locate a product she indicates interest in. 

Repeated surveys indicate that despite the usual habit of starting shopping journeys online, consumers still overwhelmingly prefer to make actual purchases in-store.  Leveraging mobile content to supplement the traditional in-store experience, can create a simpler and faster journey that caters to the consumer's demands and save him/ her time. 


1)     To know more about providing seamless and engaging in-store customer experience, meet our experts at Retail's Big show 2015. Schedule a meeting now. Visit www.infy.com/NRF15


 

The case for Online Grocery

 

 

Online retail is a very important channel today, on which every retailer is trying to gain a foothold. Giants like Amazon, Ocado, and Flipkart etc have established their online business and are trying to tap into a larger market share across the globe. Be it the retail or consumer products for new or used products, everyone wants to be on the web and doing business.

 The next big thing in the online business is Online Grocery. Online business has its own advantage on cost, but is it cost efficient? Grocery retailers today are striving hard to become unique in form of the service they provide, the range they carry or the omni-channel presence allowing easy access to the customer. But there is a definite amount of cost involved in being unique, which is a major concern for any grocery retailer. The margins are very thin and tight control on operating costs is required to meet the top and bottom line. However the buzz around going online in grocery segment remains a major thrust area in 2015.

Customer's wants are never ending and companies too are trying to satisfy them with innovative methods like click and collect, drive through, home delivery and centralized lockers, to service the customers and retain them, apart from the online offering.  There are retailers who have a physical store and also provide home delivery, drive through - these services win customers but they also mean additional cost for the retailer to manage these services. That's why online retailers have  a minimum cap of purchase for customers to avail these services.

Going online sets the retailer free from the real estate cost which occupies a major chunk of the P/L statement of any brick and mortar retailer. And added to it are other costs like power, human resources, shrinkage etc.

The advantage in the online grocery business is the use of limited manpower who could be trained to handle sensitive categories and make sure the product stays intact till it reaches the customer. Also, when a customer sitting anywhere, places the order, gets to pick it from a location near to his/her work place or home or gets it delivered, it gives enormous customer satisfaction, which is most important today. The only thing online retailers need to do is to market their services, try to reach all types of customers and make their supply chain efficient. Once the supply chain for home delivery, drive through and click-n- collect is in place, the online retailer can enjoy the cost advantage and scale up.

In conclusion, in having only a physical presence, there is always a limitation in targeting only the customers available in the catchment area. In an online business, the retailer has a better reach and the retailer can provide other services too, which improves customer centricity, apart from  benefitting both parties monetarily.

 

 

 

Digital wallet and self-check-out - are they the answer to shorter check-out queues.

Market Size projections for Mobile Wallet Range from $41 B (per Forrester Report in 2013) to $64B (emarketer report in 2014) in US by 2017.  There is an even more impressive report card for Global Mobile Wallet market with estimates ranging from $ 191 B for 2017 (ABI Research for NFC Mobile payments) to $ 1602 B (Transparency Market Research, Oct 2014) by 2018 with a CAGR of 31% from 2012-18.

As we debate the correctness of various estimates, the writing is clear - these are well and truly exciting times for Mobile Payments in general and Digital Wallets in particular.

While there is a huge potential to transform the payment space, even at current levels of maturity the market is crowded and fragmented (at least in the US) with many players aiming to take a slice of the pie - see image below on who the players are and what are the various types of offering  (US Context)

DigitalWallet Ecosystem.jpg























Image1: Overview of Different Types of Wallets and Players


One would imagine that with the plethora of options,the awareness and adoption rate will be quite high, however the reality is quite contradictory - there is a high awareness (~ 80% in US) but a dismal adoption rate (< 20% in US) (src: Yankee Group 2014 report)

So what is really the problem - does the wallet not provide the convenience or benefits? Are consumers worried about security and data privacy?

Let's now consider the benefits of a Digital Wallet. Many proponents of the digital wallet will argue that usage of wallet results in shorter check out queues. While there are really no proven data points to quantify the actual saving, on the contrary there are some examples where different digital wallets have failed miserably on usage and performance that they had to be discontinued eventually ex: Starbucks Failed Square Wallet Rollout in 2012. Also, more importantly there's nothing particularly inconvenient about traditional card payments at POS / checkout. Given this kind of a scenario, the Mobile Wallet as a replacement of Credit Card with marginal improvement in checkout times will not be a great business case.

So now let's look at critical success factors that will help in adoption and in providing better benefits to customers. These factors fall under 3 different heads:

1. Superior Customer Centric Design -Foundation of any good mobile wallet offering
2. Address Customer and Merchant Concerns

Key Concerns.jpg






Image2: Key Concerns


3. Provide Value Adds

Value Adds.jpg







Image3: Key Value Added Functionality


In short rather than limiting the benefits of the wallet to just faster checkout times (yes this is absolutely needed but it is the bare minimum), the focus has to be more on looking at the digital wallet as a customer experience enhancement platform with built in components to address concerns and provide value adds so as to enable smooth payments by the wave or tap of a phone.

The success of any digital wallet program will depend on the extent to which it scales across the 3 dimensions of design, handling concerns and providing value adds to customer (see image below)

Attributes of a Good Wallet.jpg
















Image4: Attributes of a Good Digital Wallet Solution

 

To know more about Digital wallets and how your innovation investments can help you achieve business value meet our experts at Retail's Big Show 2015 (Jan 11 - 13, 2015) Schedule a meeting now. Visit www.infy.com/NRF15

 

 

 

 

Sales-Consultant, not Salesmen in the brave new Digital World

 

Picture this scenario - a passionate photographer wants to buy a high-end laptop for his work. He goes to websites of all the top manufacturers like Dell, HP, Lenovo, and Asus, and compares various products within his price range. This enables him to short-list his query to 4 laptops. He goes to various e-commerce websites to check the offers present there, and reads up all the 350 odd reviews across the 4 products. But since he intends to buy a high end laptop, he prefers to buy it from the shop, as he wants to see the product before he buys it, and even though price is slightly higher in-store by 1-2%., He  also wants to see which other add-ons are suitable for him.

This customer is what an omni-channel customer looks like. They enter the store with consideration-set ready and researched, and they come in ready to buy, unless the store is giving him a reason not to buy.

The salesman in this case will need to be well-versed with different makes, significance of technical specifications, advantages of having higher RAM over a better processor, and details of after-sales service. He would also need a tablet wherein he can compare the laptops and discuss if the customer needs better Video-RAM or a better Hard-disk capacity. In case the salesman knows a bit about photography, he can even convince the customer to buy a good quality printer/scanner along with the laptop.

Thus, an omni-channel customer looks for a shop where he can find sales consultants, and not salesmen. These sales consultants need to be aware of what is being said by the reviewers across platforms, and need to be aware of the latest technologies. They need to know not only the price of Xbox-One and PS4, but also the price of games popular on these machines.

In case the customer is happy with his experience, this shop will be his first visit when he wants to buy an upgraded lens for his camera, or when his younger brother needs a new laptop for his MBA.

Every retailer knows the importance of the Lifetime Value of a customer. The importance of Life Time Value is probably best explained by using the Amazon Kindle example. A Kindle Fire costing $200 has components worth $165 according to estimates*. The margin is no-where close to covering the R&D expenses. Yet an average Kindle owner spends $433 extra per year on Amazon**, making Kindle a very profitable business.

Thus, providing -customer-centric information, without actively selling, can convert a walk-in into a repeat customer with high Life Time Value which results in a satisfied customer and a satisfied retailer too.

 

 

To know more about how retailers and sales associates can leverage all forms of innovation to decipher and deliver on customer needs and wants, meet our experts at Retail's Big show 2015 (Jan 11 - 13, 2015). Schedule a meeting now. Visit www.infy.com/NRF15

December 16, 2014

2015: THE YEAR OF ONLINE GROCERY? (PART - 2)

With the U.S consumers' wallet share on ONLINE GROCERY growing rapidly, there is a subtle battle brewing between traditional retailers and e-tailers to capture their share of wallet. Given this is an industry typically characterized as highly price sensitive, hyper-competitive with razor thin margins and high purchase frequency - 'How to drive profitable revenues and build a sustainable, scalable (mass-market) online grocery business model?' is a key conundrum faced by U.S grocery retailers today.

Without a doubt, the U.S Online Grocery industry is experiencing a structural shift [see Figure 1] in the way consumers shop for groceries today. Few key trends defining this landscape, worthwhile to note are: price-to-value continues to remain an important driver for consumers who are seamlessly shopping for food and beverage across various store formats (no longer shopping at just one stop shop supermarkets), local and private labels are gaining popularity (better assortment mix), and last-mile delivery continues to be more challenging for retailers with diversifying consumer needs. So, what drives a consumer to shop online?[1] 

 

Grocery Image_3.jpgGrocery Image_4.jpg 

 

 

 


Turns out, Convenience still remains their primary motivation, though not the ONLY reason [see Figure 2] - according to a U.S Grocery Shopper Trends 2012 - Executive Summary published by Food Marketing Institute (FMI). Clearly, some of these reasons are easily replicable by the traditional retailers making it a level playing field for them. So, how can grocery players tap onto this opportunity today and make MONEY at the same time?
 
A Grocer's Perspective
 
De-constructing the P&L of a grocery business model [see Figure 3] shows that the overall economics of this business mainly depends on: the type of fulfillment model used (meaning productivity in number of units picked per hour), basket size, consumer demand, and population density.[2] 
 
Grocery Image_5.jpg
Clearly, a one size fit all approach where-in an e-tailer offering only a home-delivery or a traditional brick and mortar retailer offering only an in-store pick-up might not be viable and profitable. Instead, both e-tailers and traditional brick and mortar retailers, will have to strategically innovate to harness the given market opportunity. Consequently, rather than having a home delivery model across all geographies, brick and mortar retailers can play it by the consumer demand and population density to leverage a combination of fulfillment models e.g. in areas of low density and low consumer demand they can offer variations of click-and-collect models (in store, curbside pickups, delivering to your cars - Volvo seems to be innovating on this front), areas of high density with high consumer demand can leverage dark stores (dedicated warehouses) to offer home deliveries. E-tailers too, can leverage a similar strategy in offering variations of click-and-collect models (car deliveries, specific location pick-up) to drive up their revenues. Having looked at the "last-mile" logistics of the food delivery, now let's look at the consumer side of interactions - how can grocery players engage better with changing consumer needs?
 
A Consumer's Perspective
 
Offering a "differentiated digitally connected seamless" shopping experience today will entail: brick and mortar retailers looking at leveraging location based services to offer a more contextualized, and personalized in-store experience. E-tailers can explore the possibility of offering virtual grocery stores, and contextualized basket building features to match the in-store experiences offered by a brick-and-mortar retailer. In my opinion, some of the key capabilities [see Figure 4] emerging for grocery players today are:
 
Grocery Image_6.jpg

Given the relative economics of grocery business, offering a right combination of click-and-collect and home delivery models that "seamlessly" integrates with a "differentiated digitally connected shopping" experience will be the key to position the grocery retailers for success ahead. Grocery retailers to realize this first will continue to stay relevant to take it all.

As traditional retailers build upon their omni-channel capabilities to be more "online-like" and e-tailers continue to expand their offerings to be more "store-like", it will be interesting to see who wins in this unclaimed territory. Whom do you think will win? 
 

To know more about trends in online grocery and how you can leverage various innovative technologies to provide a seamless and truly engaging customer experience, meet our experts at Retail's Big Show 2015 (Jan 11-13, 2015). Schedule a meeting now. Visit www.infy.com/NRF15



[1] U.S Grocery Shopper Trends 2012 - Executive Summary by FMI: www.icn-net.com/docs/12086_FMIN_Trends2012_v5.pdf

[2] Online grocery winners emerging - A Report by Bank of America Merrill Lynch

December 15, 2014

Consumers can 'bank' upon Wearables

Wearable devices are surely going to make doing business and making consumption choices easy and the retail industry is one of the biggest beneficiaries of this. In fact, the impact would go beyond retailers and the online business and extend to even consumer banking. In fact one can visualize the boundaries between the retail business and banking business blurring in the new digital age.

As consumers seek easier and more convenient ways to shop and then pay, the retail and payments worlds are likely to collide in the internet expressway to create a smooth seamless transaction for the customer.

For example, a customer walking into a store with a Google glass will use the Google glass to do various things such as - find his way to the nearest store, seek the aisle he wants, receive any promotional updates about products, browse product information and the same Google Glass will also allow users to connect to internet and access all bank account related information and conduct transactions using voice commands. The user could look at his account details, pay bills by taking pictures of them and commanding the app to "Pay Bill".  Another use case here could be, that next time round the customer is walking down the retail aisle/or passing by a restaurant/store, he can get targeted and customized offers of products and services on his Glass, which fit his 'client profile' and there is history of a payment made through his account for the particular category.

To extend the use of the Google glass further, the app will also help him find the nearest ATM/Branch. The user could simply deposit a check by looking at it (the image of the cheque is taken and processed for clearing).

Now let's look at a use case which might be applicable to the Relationship Manager of a bank, such a person would also find the device extremely useful. Once he gets a call from a potential lead, he will be able to reach the client on time, using its easy navigation interface. The conversation with a customer in a different language will be far easier, due to speech to text and language translation apps, on the Glass. Incase, the client needs more detailed product information, the same question can be transferred 'live' to a product expert, who can instantly see and hear the query. Once the questions have been answered and the customer decides to sign up, all he has to do is speak required information and a customized app on the phone automatically converts it into text and feeds it into an application form. Signatures can be collected digitally. Finally, customers photograph and copies of on-boarding documents can be instantly uploaded by saying "take picture". Funds for the account could be transferred instantly using a wallet application on the Glass. That's all! This really makes life much easier for a customer, by having a constructive discussion and completing all the mundane paper work very fast. 

The new Avtaar of Transactions

When I hear "Digital Wallet", the first thought that comes to my mind is that it is the Digital version of my physical wallet, carrying the same things as my physical wallet (Money (Cash, Credit cards, Debit cards, etc.) & Proof of identity (Driver's license for example)), but in Digital format.

While there's nothing wrong with the physical wallet, there is only ONE big issue with it, that of SECURITY. It is very easy to lose it, it is very susceptible to theft, and the consequences could be scary:

·         Card Frauds: Worldwide losses due to such frauds are estimated to be around $11.27 billion in 2012a

·         Identity Theft: In US alone, Direct and indirect identity theft losses was close to $24.7 billion in 2012b

Now think of a digital wallet, which has all of your monetary & Identity information safely & securely guarded by a service provider (SP). All that you will need, to use your "Digital Wallet", is a unique PIN provided by the SP.

Safety & Security aside, the biggest benefit I see from a Digital Wallet, when the world is ready for it, is CONVENIENT & HASSLE-FREE transaction experience! And here's how:

·         You go to a coffee shop / bakery, visit their app on your smartphone, place order & pay for it, 'Digitally', and leave.

·         You go to your favorite Grocery store / Supermarket and pick up your items. You will simply make a 'Digital' payment on the store's app for what you picked up, and leave.

·         You go to your favorite electronics / apparel store in the holiday season, but you no longer have to feel intimidated by the check-out queue. You will simply pay 'Digitally' on the store's app for what you picked up, and done!

Digital Wallet, in the presence of supporting infrastructure at the Retailers, will certainly reverse the impact of long queues on Sales & Customer Retention:

1.     Sales

·  Long queues have had detrimental effect on sales for the retailers.

                       i.    In the US, back-to-school retailers end up losing around $21 billion of  $55 billion due to long queues & slow check-outs c

                       ii.    British Retailers lose over £ 1 Billion every year due to long queues d

2.     Customer Retention

·  Long queues create a negative impression in Customer's mind, about the retailer.

                       i.    Poor customer service due to long queues cause UK businesses to lose 21 million customers a year e

                       ii.    Customers in the US leave the store without making a purchase after waiting for more than 8 minutes f

1.     77% of such customers would avoid visiting the store in the future g

                       iii.    The patience is lesser in UK customers, who will leave the store after 6 minutes of waiting time.

1.     56% of such customers would avoid visiting the store in the future h

What other things do YOU think digital wallet can impact & simplify?

To know more about Digital wallets and how you can leverage various innovative technologies to provide seamless and engaging customer experience, meet our experts at Retail's Big Show 2015. Schedule a meeting now. Visit www.infy.com/NRF15

 

References

a: http://www.businesswire.com/news/home/20130819005953/en/Global-Credit-Debit-Prepaid-Card-Fraud-Losses#.VIlsx9KUe_Q

b: http://www.bjs.gov/content/pub/pdf/vit12.pdf

c: http://www.shmula.com/back-to-school-revenue-loss-waiting-line-frustration/4752/

d: http://www.telegraph.co.uk/technology/news/10702831/Long-queues-cost-British-retailers-1bn-a-year.html

e; http://customerthink.com/21_million_customers_lost_due_to_long_queues/

f: http://www.fierceretail.com/story/report-after-8-minutes-line-shoppers-walk-out/2014-02-27

g: http://www.bizreport.com/2013/08/british-shoppers-patience-runs-out-after-six-minutes-of-queu.html

h: http://www.essentialretail.com/news/article/tech-evolution-reducing-queuing-patience

December 11, 2014

2015: THE YEAR OF ONLINE GROCERY? (PART - 1)

Ever imagined a scenario where we will be clicking online for our books, media and GROCERY together? Yes, you read it correctly. GROCERIES... ONLINE? Today, Online Grocery shopping is not only a reality, but also an industry that is accelerating, quickly enough, towards its tipping pointAmazon Fresh[1] and few other retailers like Walmart, Safeway, Instacart, Peapod, Relay Foods and FreshDirect have been transforming the online grocery space to carve out a market share from this unclaimed territory so far.

As a part of this two blog series, we will take a peek at how the U.S Online Grocery industry is positioned for 2015 and the opportunities ahead for the U.S Grocery Retailers.

When we think of Online Grocery as a business, the first thing that comes to mind is the implosion of Webvan in early 2000s. Thus as a concept, online grocery is not something new to consumers and retailers. Webvan's emblematic failure did leave a wary glance on grocery retailers for a long enough time though. Ever mindful of the quote "Change is the only constant in life" - two vital changes in this case are: 1. the growing evolution in the way today's digitally immersive consumer expects to shop seamlessly, both between physical and digital world anywhere, anytime, 2. more viable grocery business models attracting capital savvy investors.

In 2013, US online grocery spending reached $17 billion [see Figure 1], Grocery Image-1.jpgaccounting for only 3.3% of the total U.S grocery spending  - a $500 billion industry -    according to an article[2] by Bloomberg BusinessWeek citing a study run by online grocer and consumer analyst Brick Meets Click. Further, by 2023, it is expected to reach 11% of the total U.S grocery spending growing nearly 3 times at 13% CAGR annually. Looking forward, in my opinion, online grocery represents a significant and exciting growth opportunity that is here to stay.

So, market side of the equation is looking great. Online Grocery Industry is gaining popularity and exhibits great potential for the years ahead. But, what about the consumer side: the Grocery Shoppers? With time, not only has the grocery market and business models changed but digital consumers' purchasing preferences have too. Especially, the way today's tech savvy digital shoppers are increasingly blurring the line between the online and offline channels.

In 2013, roughly 18% of U.S. households went online in the past three months to buy food, beverages, or groceries. Of these, 75% purchased 5% or more online and 20% purchased at least half online - according to an article by Grocery Headquarters citing a study  Grocery Image 2.jpg  'The Online Grocery Shopper Report'[3] run by The Hartman Group's. Further, the article characterizes an online grocery shopper as a high-value customer, who is willing to spend and shop more every month than the offline (at-store only) grocery customers [see Figure 2]. 

The confluence of societal changes (busy urban lifestyles wanting more convenience and less time-intensive ways to shop), demographical changes (more working women, multi-person high-income households, ageing population), and technological advancements (digitally connected consumer increasingly using smartphones and tablets to complete purchases) have led me to believe that the U.S Online grocery market will soon evolve from a niche segment to become a mass-market mainstream appeal. 

 

Given the U.S Online Grocery's tremendous future market potential, the question however still remains: Who is poised to claim this unclaimed territory? Traditional retailers or the E-tailers? The race is already on. Whom do you think will win?

In the next blog, we will explore the opportunities ahead for the grocery retailers.

 

To know more about trends in online grocery and how you can leverage various innovative technologies to provide a seamless and truly engaging customer experience, meet our experts at Retail's Big Show 2015 (Jan 11-13, 2015). Schedule a meeting now. Visit www.infy.com/NRF15

 

 

 
 

Subscribe to this blog's feed

Follow us on

Blogger Profiles

Infosys on Twitter