Better CX: How grocery retail can evolve post-lockdown


Six months since the pandemic began, Covid-19 has forced evolution by necessity in grocery retail.

Before lock-down, the rise of discount retailers, online retailing and digital disruptors like Amazon were already pressuring incumbent grocers to digitally transform their offerings. Amazon’s acquisition of Wholefoods in 2017 was a major catalyst for the global FMCG market and triggered a flurry of activity in the sector. The emergence of major deals since, including Alibaba’s investment of £2.9Bn into Asia’s largest supermarket chain and Target’s $550m acquisition of delivery platform Shipt, have shown that the “platformification” of grocery was already well underway. 

Throw in COVID-19 and you now have a sector currently undergoing major disruption. In the four weeks ending 16th May, Nielsen reported online grocery spend totalling 1.2 billion, representing a year-on-year growth of 103%. The numbers of people shopping for groceries online for the first time also shot up to 7.9 million, almost doubling from 4.8 million in the same year.

Growth in the online channel brings new challenges. Grocery retail needs to evolve in the vein of other retail sectors to drive growth beyond the pandemic, particularly where customer experience is concerned. The digital experience is now a critical element of this process which grocery retailers need to get to grips with sooner rather than later.


Friction-free experiences

Over the last decade, platform technology has enabled business markets to respond nimbly to evolving customer needs. It is the rise of the platform in almost every single sector that has led to a global shift from the organisational economy of the 20th century, to a market-based platform economy of the 21st century. 

The grocery retail sector however has struggled to capitalise as effectively, however. Incumbent grocers have been undercut by direct-to-consumer competitors who, far more digitally savvy, are able to build valuable relationships with consumers via superior customer experiences. What’s called the digital experience economy is a vital element of this, and at the core of this is scaling high quality, highly relevant customer experiences that service customer needs efficiently. 

But, here’s the kicker. Such digital transformation must be enacted swiftly and without burning profits, and therein lies the problem. For over a century, grocery retail has focused primarily on the model of cost-based pricing, self service efficiency and vertically integrated supply chains. When you apply those practices to scaling online, you get a terrific cash-burning machine. 

READ MORE: Co-op partners with Buymie to expand same-day grocery delivery to 200,000 more homes

The New World requires a whole new way of thinking. It involves reimagining the customer experience, utilising value driven and dynamic pricing, focusing on data flow and connectivity, joining up CRM data with disciplines such as AI, UX and UI, and facilitating frictionless shipping and delivery. These all require skill sets and expertise which the grocery industry simply struggles to attract, mainly due to the competitive salaries and unending benefits offered by the platform players like Amazon, Google, Facebook etc. 

Amazon’s acquisition of Whole Foods in the US and partnership with Morrisons in the UK is a telling sign of things to come. Before the pandemic, Amazon’s logistics network already provided a business edge which few other UK retailers could match. In the wake of the pandemic, they pivoted rapidly to increase their provision of  frictionless delivery for groceries,  via both their mainstream Prime offering, and their rapid-delivery Amazon Now infrastructure.


Driving delivery home

Shipping and delivery is often make or break for a brand, and this is true of grocery retail too. Accenture research in 2016 found two-thirds of consumers chose one retailer over another simply on the basis of delivery,  whilst a 2019 Metapak report found that 47% of respondents based in metropolis areas wanted online merchants to offer a one-hour delivery service. Clearly, customer expectations are high, demanding that retailers adapt to an increasingly customer centric business model.

For retailers, a superior delivery experience is underpinned by an understanding of the importance of platform technology, data science and shared infrastructures. Easy communication between the customer, the retailer and the delivery partner is vital to ensuring peace of mind for all parties, and the key to this is deep integrations which augment the existing retail assets and intertwine the last mile supply chain directly into the in-store/retail operations.

Availability of delivery time slots is also pivotal for smooth progress in the online sales funnel. D2C retailers such as Amazon have heightened customer expectations of prompt delivery, but multiple grocery retailers struggled over the duration of the pandemic to keep up with demand for time-slots. Why? Because their business models require the heaviest of CAPEX and slowest of lead-in times, in the building of warehouses and the purchase of vans. 

Even “shared” vertically integrated partnerships like Ocado/Waitrose/Morrisons have struggled to scale effectively. Now, grocery retailers are realising that they don’t have to do it on their own. For example, the U.S, – arguably the most Amazon aware market – has seen companies like instacart and Shipt form deep partnerships with the likes of Costco, Kroger and Target. These provide opportunities to target new customers and reduce costs in a mutually beneficial manner.

The lesson here is stark; when it comes to competing in the world of same day delivery and rapidly changing consumer habits, platform is key. Shared infrastructures are the only competitive tool to fend off Amazon – the trillion dollar gorilla. 

And let’s be very clear about just how dominant Amazon is: 



  • At the time of writing, Amazon has a market cap of 1.58Trn, making it six times larger than the entire UK & Ireland grocery markets combined – and sixty times larger than the biggest UK grocer, Tesco Plc. 


The lockdown has presented multiple lessons for grocery retailers. It has  highlighted the importance of digital technology to the context of the overall customer experience. By combining  innovative technologies with a progressive mindset, grocery providers’ delivery can be transformed into a smooth and convenient experience that keeps customers loyal, and operations profitable. 

Devan Hughes, CEO & co-founder, Buymie



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