As we all know, Covid-19 has accelerated the rise of online grocery shopping and with it an almost daily news update of announcements from the major grocers as they battle to get product into online baskets.
With Ocado now nearing the same valuation of Tesco, despite selling so much less in total grocery value, it is clear that the city and investors feel that online delivery is where its all at. As we exit another national lockdown and the challenges of booking an online slot becomes a hot topic once more, its hard to argue.
Covid enforced habits will change our grocery purchasing behaviour forever and because of that we are seeing a huge scramble by the grocers to meet demand right now but also in the medium to long term.
One of the interesting developments has been the partnering of the supermarkets with delivery platforms such as Deliveroo, Uber Eats and other smaller local start ups. Both Asda and Sainsbury’s are trialling delivery with Uber Eats, while a slew of grocers including Morrisons, Co-op and Waitrose (recently replaced by M&S on Ocado) are now on Deliveroo. The question is why, when some have their own Ecommerce delivery options? The answer is multifold.
These apps are surging in popularity and offer the grocers exposure to customers that may not already be shopping with them. It offers another channel of customer acquisition and an opportunity to switch customers away from their rivals.
It also allows them to tap into a well established logistics infrastructure that can deliver food faster than they are able to fulfil orders themselves. This reflects the continuing consumer trend for more ‘on demand’ services and convenience across all sectors.
It also allows those supermarkets that do not have ecommerce functionality to establish an online presence and test consumer demand and build learnings into their own future product development roadmaps.
Interestingly, we are also seeing the rise of food manufacturers creating their own ‘Direct to Consumer’ offerings. The best known example at the moment is probably Heinz which allows people to buy their range of ‘family favourite’ brands. However, it won’t be long before these too are made available on the food delivery apps.
With the inevitability of further local and perhaps national lockdowns and the changing behaviour that will ensue, our own research shows that manufacturers are missing out on valuable online sales by not adjusting their own strategies.
Each of the retailer ecommerce sites and each of the online delivery apps have their own distinct search engines, which like Google, requires an unique approach to ensure that products are visible, found and placed into baskets for purchase. Too many brands are adopting the same strategy across each of the retail sites and missing out on incremental sales.
The result of all of this is that brands need to be thinking digital first and better understanding the consumer shopping behaviour, across more online platforms than ever before.
Tony Thomas, Head of Digital Shelf Optimisation, Threepipe Reply