Consumers are used to a certain level of convenience. Online shopping and quick delivery rules the retail industry today, and consumers don’t even have to leave their beds in order to complete their weekly errands. Just a few taps of a button, and their goods will arrive on their doorstep.
Grocery delivery was the logical next step for this retail environment. Grocery shopping is one errand that many people need to complete weekly, stocking up on necessities like milk, bread, coffee, eggs, or butter. It’s not a rare task, and, to be frank, it’s not a task that many people enjoy doing today.
If a modern grocery store doesn’t offer an elevated experience, it can be a drag for shoppers to come in each and every week and purchase what they need. It can feel monotonous, inconvenient, and even frustrating to shop in a grocery store that hasn’t stepped into the new world of experience-focused retail.
So, what do you give a shopper who doesn’t want to shop in your store? The option to have their groceries delivered right to their home. Et voila, grocery delivery.
The current state of grocery delivery
Grocery delivery is a service wherein a shopper orders their items online, and they are delivered right to their home. It eliminates the need to head to the store for a weekly shop, or an impulse purchase.
The concept itself was slow to catch on in the United States compared to other countries around the world. In South Korea, 20% of consumers buy groceries online, and in both the United Kingdom and Japan, 7.5% of consumers do the same.
While grocery delivery has become quite common around the world, even becoming a preferred method for many shoppers, American consumers seem to have waited to judge its success before jumping in. Now, they’ve capitulated with full force.
Coresight recently conducted a study that showed 36.8% of internet-using adults polled bought groceries online in the previous 12 months, up from 23.1% in their 2018 study. That equates to approximately 93 million online grocery purchases using U.S. Census data.
Of interest to you: the majority of these purchases came from retailers like Walmart and Target, followed by Kroger.
If you take into account the average American consumer’s buying power, it’s clear that grocery delivery’s popularity could become a major income stream for grocers across the country.
And they’ll need it. Amazon has dipped its toe into the water of the grocery industry over the past few years, and grocers need to adapt and innovate in order to stay competitive with technology-savvy shoppers.
Who is doing grocery delivery well?
As mentioned above there are a few retailers who are dominating the grocery delivery category, and they all happen to be major grocery industry leaders. Though many independent grocers offer delivery, the majority of purchases take place through Walmart, Target, and Kroger.
According to Supermarket News, “Walmart and Kroger have more than doubled their online grocery shopper numbers over the past 12 months, adding about 20 million and 6 million online customers, respectively.”
Those numbers are staggering in light of grocery delivery’s relatively recent popularity in the United States. Now that it’s caught on with the average shopper, it won’t be going away anytime soon, and consumers will begin to expect a delivery option from even the most independent grocer.
If you’re reading this as a small, independent grocer, you may have just let out a groan. So many grocery industry trends feel like they leave out “the little guy”, the hometown grocer who actually provides that individualized experience that customers say they crave. You feel like you’re doing everything right, but that innovations are leaving you and your business in the dust.
Not grocery delivery.
Because of its near ubiquitous adoption across the country, startups have popped up to assist grocers with executing on a grocery delivery strategy. Third party delivery systems like Shipt and Instacart exist, and they’re here to help your business implement grocery delivery without a large operation or logistical nightmare. An official partnership will still be an investment, but one well worth taking on if you want to remain relevant in today’s retail atmosphere.
Pros and cons of grocery delivery
Every trend has its upsides and its downsides, and it’s up to you, as a grocer, to decide what makes the most sense for your business. But, you don’t have to do it alone. We’re here to help you break it down.
Let’s start with the benefits, or the “pros” of grocery delivery, shall we?
First and foremost, the convenience factor. Customers are no longer patient. They no longer are forced to take part in activities that they don’t enjoy, that don’t add value to their lives, that don’t bring them joy. Grocery shopping can easily fall into the category of “things I don’t want to do”, therefore giving your store a negative association simply for existing.
When customers aren’t given the option to forgo traditional means of retail, they can become frustrated, and, instead of relishing in the experience you’ve created in your store, instead of finding the joy in the person-to-person interactions you encourage with your store associates, they’ll find themselves resenting the fact that they have to leave their homes to shop each and every week. When they’re strapped for time, or strapped for energy, they want to be able to turn to a convenient option. Grocery delivery provides that to them.
More than convenience, grocery delivery is also a trending concept in the United States market. It’s gaining momentum quickly, and we would be remiss to say that it could be important for your business to jump on the trend right now while it’s hot. If you want your grocery stores to be considered thought leaders, innovators, or customer service-focused, you’ll want to look into the bevy of ways that you can offer a grocery delivery service. Even if you work with a third party delivery system, you’ll find that your customers will view you in a whole new light.
One more bonus to grocery delivery: it’s all done digitally, which allows you to gather new insights on your shoppers. Users must typically opt in to the service, and provide contact information like an email address or a phone number. This gives you a new way to contact them with promotions and information that could be relevant to them. While your usual access to a customer may be through in-person interaction and traditional advertising, implementing a grocery delivery service with a digital platform could allow you to push deals directly to your customers through their device or through the contact information that they provide. You’ll also be able to gain insights from their purchases through your delivery service to make informed inventory and advertising decisions.
Now for the negative side of grocery delivery. Though this concept is fast-growing in America, it does have its downsides, and it’s imperative that you evaluate your individual business situation before making any large scale operational decisions.
The first piece that we have to point out about grocery delivery is that it’s not easily accessible for every grocer. Large retailers like Walmart, Target, and Kroger have success with their grocery delivery services because they have the resources (financial, operational, and personnel) to handle the complicated logistics involved with grocery delivery.
As an independent grocer, you’ll likely have to utilize a third party vendor relationship in order to implement grocery delivery. That doesn’t have to be a bad thing for your business, as these vendors already have thorough experience with grocery delivery. However, it means that you don’t have direct control over what happens to your product as it’s being delivered from point A to point B. You won’t have direct control over the experience your customers are being provided. When you don’t have an in-house service, you simply cannot control the many variables that come into play with grocery delivery, and that could mean hardship for your business.
Finally, let’s talk financials. Grocery delivery may be cost effective for your customer, but it’s a major investment for you if you try to build your own internal operational structure. Hiring the personnel needed to have an effective grocery delivery service will cost you cash, and implementing the processes and procedures needed to make sure your customer has an elevated experience will cost time and money. The financial stability (and cash on hand) needed to run a DIY grocery delivery service for your grocery store is significant, and it’s something that definitely needs to be considered.
Grocery delivery is one of the hottest trends in this industry, and perhaps the one that is most achievable, even for independent grocers. Though it’s been around for a few years now in the United States, now is the time to hop on the trend because it has been proven to be a success with so many retailers. Consider your business situation and see if there is room in your strategic plan and your budget for a grocery delivery system. It could be a piece of the puzzle that skyrockets your business in 2020.