In recent years the supermarket industry has evolved rapidly. Consumer trends have pivoted with new technology-focused generations stepping up to get their groceries. The biggest transformation that supermarkets have had to implement is the adoption of technology, specifically online shopping and grocery apps. What used to be based on foot traffic has now shifted online where supermarkets are having a battle to see who can make shoppers lives the easiest. Click and collect and online delivery seem to be the way the majority of customers are choosing to get their weekly groceries. As consumers lives continue to get busier, not having to leave the house or run errands becomes increasingly appealing.
New Zealanders more than ever are choosing to hit the online retailer world, opting for convenience. Recent Bank of New Zealand statistics shows that online retail spending by New Zealanders is up 17 percent year-on-year, continuing its strong growth pattern. Grocery and liquor sales alone saw an increase of 23 percent. According to a Nielsen study, 20 percent of all groceries will be bought online by 2025.
While the online market continues to grow at such an exceeded rate why are some retailers still failing to embrace a full e-commerce offering and what improvements can be made to make it easier for shoppers to navigate an online platform?
Not only has technology seen the rise of online shopping and supermarkets apps but the technology is already beginning to be installed in at-home appliances. Fridges are now being installed with smart technology that allows consumers to order straight from their fridge. New Zealand was witness to this next level technology when Samsung’s Family Hub refrigerator made its way to the New Zealand market. Fitted with a 21.5-inch full-HD LCD screen that connects directly to Countdown’s online shopping platform, it couldn’t be easier to get groceries delivered.
While New World has no online shopping capabilities it instead has chosen to provide its customers with an easy-to-use app. “We had been using a website at trial stores in the lower North Island for more than three years. The app route supported a broader long-term strategy around the mobile consumer. Mobile is already the dominant channel to engage with our brands online, and purchasing groceries online is just one mobile experience that will integrate seamlessly with customers’ lives. The decision to go mobile first encouraged us to acquire skills, talent, capability, and a test and learn mindset that will provide a strategic advantage in the years ahead,” said David Brem, Head of Digital Marketing, Foodstuffs New Zealand.
Leading premium grocery retailer Farro Fresh does have an online shopping platform, however, it does not offer full ranging. “We don’t offer full ranging on our e-commerce site as customer feedback has told us that shopping in-store at Farro Fresh is a pleasure rather than a chore. Our customers shop with us for our superior service, unique product offerings, in-store tastings and the overall pleasant in-store experience that we offer. Our foot traffic in-store continues to grow,” said Fiona McCauley, customer experience officer at Farro Fresh.
Farro Fresh is gearing up to launch a new e-commerce site in the coming week. While the site won’t offer full ranging, it will provide a selection of speciality items such as Christmas offerings.
With customer convenience being more important than ever it’s even more crucial for retailers to have not only some kind of online presence, but for that only presence to be easier to navigate. Supermarkets should take look at other online retailers such as Mighty Ape when considering what improvements can be made to enhance the online experience. Categorising products is crucial to a successful website and this could be adopted by supermarkets better. In addition to traditional food categories, supermarkets should look into categorising foods further, into groups such as; new arrivals, local, best of, artisan, country of origin, health star ratings and even seasonal selections.
Not only can creating easier navigation improve the online shopping experience but giving consumers more information can make decision-making easier. Providing an image of the back of the product with a magnifying option can replicate how consumers shop in-store. With more health-conscious consumers information is key and providing a visual not only offers this but also puts customers at ease. Currently, just a few points are listed from the back-of-the-pack, if any.
Incorporating other technologies into a store’s Click and Collect system is another way to create customer ease and increase sales. Some Countdown stores in New Zealand have implanted Geofencing into their Click and Collect features. The technology can locate a mobile device once it has entered a zone, for example, a supermarket car park. An alert will be sent to staff as a customer enters allowing them to prepare and deliver the items quickly and efficiently to the customer just outside the store.
“We are seeing more of our customers downloading and using our Countdown pick up app, which alerts customers that their online grocery order is ready to pick up while letting the store team know when that customer is nearing the store It is a first for New Zealand retailers, the Click and Collect app uses GPS to create a ‘geo-fence’ with a 400-meter radius around a Countdown store. As a customer approaches the store and ‘breaks’ the fence, the in-store team is alerted. A message is sent back to the customer’s device to let them know the store is aware they’re near and is getting their order ready for collection. When the customer arrives, the order is ready to pick up at the same time,” explained Sally Copland, general manager digital at Countdown.
Showcasing an online checkout at all times allows the customer to not only see how much or what they are purchasing but also puts the customer at ease as it creates easy access to the next stage of the shopping experience.
“Internal business processes need to be top notch to run a successful e-commerce site. Elements such as; stock on hand (to minimise the need for substitutions), up to date product information and ensuring that the service is updated regularly to reflect customer needs while minimising the impact on the in-store experience are all challenges that store owners face. We see all of these challenges as opportunities. Getting the online solution right has benefits for overall operations and supports more customer-centric decision making,” explained Brem.
The rise of smart technology in supermarkets is only set to increase and considering what is happening overseas New Zealand still has a long way to go. America is currently witnessing the rise of driverless delivery systems and cash-less checkouts as well as one-hour deliveries. Amazon Go has recently announced its aim to open a further 3000 cash-less stores by 2021 while major retailers such as Walmart and Kroger are already trailing driverless delivery systems. It is the classic adapt or die scenario and supermarkets, just like other retailers, will have to embrace the future.