The State of Grocery E-commerce: 7 Top Trends in Online Grocery for 2019
If you work in the grocery sector, you know that the growth of online grocery has shaken up traditional channels. More consumers are embracing online grocery shopping, pushing the online US grocery market to $26.5bn by 2025. Innovative grocers are embracing new technology to create a seamless, convenient and affordable experience for their customers.
Trends may come and go but for online groceries, these seven look set to stay. Read on to learn about the 7 top online grocery trends for 2019.
7 Online Grocery Trends
- Warehouse automation & AI
- Voice commerce
- Loyalty programs
- Shoppable recipes
- Personalisation (at scale)
- Fast home deliveries, click and collect & robots
- Solving the “fresh challenge”
1. Warehouse automation & AI
One of the main challenges preventing grocers to become leaders in online grocery is the cost that comes with it. Extra associate work on tedious grocery packing while online grocery market still accounts for only 3% of total grocery spend is causing significant expenses. Consumers want cheaper and faster delivery and are putting a lot of pressure on grocers to deliver to their expectations.
One of the ways grocers are solving this challenge is by investing more in warehouse automation powered by AI. Creating a solution that can be completely automated removing humans from the process is still presenting problems, but grocers are keen to get it solved.
Ocado has, for example, created an automated warehouse filled with thousands of robots that sort, pack and hand the products to associates who then pack groceries themselves. But according to Amazon completely automated warehouses are still a decade away.
2. Voice commerce
Consumers are desperate for convenience when grocery shopping. While voice search is still in its infancy, research shows that a lot of grocers are stuck because they don’t know how to proceed to create a seamless experience with voice.
According to Adobe, 91% of companies are investing in voice technologies including voice-enabled commerce. This means that voice search and commerce are growing in importance for 9 in 10 companies. And we believe that voice commerce will become an important aspect of our everyday grocery shopping… as soon as the friction is removed. That will make 45% of millennials who use voice assistants while shopping very happy!
Grocers are still new to this game and are trying to launch skills and apps that will allow for frictionless voice commerce solutions for their stores. Until all the friction is removed, grocers can grab some of the market share and win a way to consumers’ hearts for people who like to reorder the items frequently, according to Emarketer.
Kroger, Peapod and Walmart (to name a few) have all tried introducing voice ordering to their suite of solutions targeted at improving online ordering and making a seamless experience for their consumers.
3. Loyalty programs that go beyond discounts
Consumers like to shop around always looking for better prices or particular products across different stores. Online grocery is making it even easier for a shopper to shop around as the only thing they need to do is switch to another tab to compare prices and product availability.
Loyalty programs are not news in the grocery industry, but the way they are used today is changed thanks to advances in technology and insights available from it. One of the things that we expect to see in the future is loyalty programs that are focused around making people stick to online shopping and not only to the particular store by providing more value to the users who purchase groceries online.
And sometimes it’s not about the technology at all – just look at Publix going above and beyond to improve their customer service for the best experience.
4. Shoppable recipes
Finding ways to stay on top of mind for digitally savvy consumers in the crowded market is proving to be very challenging for a lot of grocers. Being the grocery store of choice on different off platform solutions is something innovative grocers understand they need to do if they want to make their store first choice.
As shopping habits change from filling up our fridges and pantries with groceries for the week to purchasing groceries we need for a particular meal, shoppable recipes gain in popularity. Making every touchpoint shoppable on and off grocery platform is becoming more important than ever for leading grocers who are looking for ways to monetize every purchasing opportunity.
From Walmart to AmazonFresh, grocers are benefitting from the presence on different publishing platforms and being the grocery store of choice for millions of potential customers.
5. Personalisation (at scale)
Understanding the what, when, where and how customers buy and acting on those insights is the pressing issue for many grocers today. By leveraging technology to introduce smarter and better personalisation strategies, grocers are benefiting from increased engagement, loyalty and basket size. Plus those that can crack the personalisation game first will prove to be the leading innovators in the industry and will capture the biggest market share.
One of the ways to innovate fast for grocers will be to partner with smart, agile startups who have years of experience in building technology that helps them create the best, personalised programs for their consumers.
Meanwhile, startups like Whisk are harnessing agile AI platforms to recognise user preferences across food preferences, diets, avoidances, health conditions and even flavour to create personalised recommendations that help speed up the process of creating shopping lists from recipes.
6. Faster home delivery, click and collect & robots
Convenience is the key to success in grocery and the race to get a faster, cheaper delivery solution is never-ending. Every consumer would ultimately like to get great value groceries on demand, so the race for affordable same day delivery solutions is intense.
From click and collect to smart lock home delivery solutions and using robots to deliver groceries, we can expect to see ever more creative innovations from grocers for many years to come.
Grocery delivery robots and driverless deliveries have been growing in popularity in recent years with grocers like Amazon, Kroger and Walmart testing different solutions to improve last-mile delivery.
7. Solving the “fresh challenge”
One of the most cited objections to purchasing groceries online is the fresh produce challenge. Consumers are reluctant to have someone else pick fresh produce for them.
Navigating in-store cameras that shoppers can use to pick up their fresh produce might be a way to convince the doubting consumer that their order will be fresh as they expect. This is something that seems not to be on the list of grocers priorities but as e-commerce continues to grow, it might pop up to be on the top of grocers’ priority lists very soon.
Food delivery services like Instacart and IdeoClick are doing their best to make sure produce they pick is always of extra quality so that the consumer never has a bad experience. After a while, consumers will become more trusting in having someone else pick their fresh produce.
As online grocery still accounts for a smaller share of the grocery market, grocers seem to be slower to invest in solutions that can help them create a seamless, more personalised shopping experience for their consumers. Those who are quick to innovate and test different approaches will be the ones who are the readiest once the e-commerce takes over grocery.