Omni-commerce is the Key to Grocers Staying Competitive in the Industry

Grocers should offer both online services as well as physical stores to stay competitive in the evolving grocery industry.

Offering online shopping and also having physical locations is key for grocers. More and more companies are putting their products online for shoppers to buy their groceries whenever and wherever is most convenient for them. Companies who are not currently utilizing online services should do so soon to keep up with what the modern consumer wants.

“Retailers need a digital experience to embrace the way the shopper is behaving,” Chris Bryson, CEO and founder of Unata, an e-commerce grocery shopping engine, said.

Unata represents 1,300 grocery store locations and those stores are hitting over 5 percent in online sales while stores who do not use platforms like Unata only see around 1 percent in online sales. The company uncovers how shoppers behave and allows them to choose how they want to shop.

Additionally, online shoppers spend more than those who shop in store. “When grocers add this [online shopping] on, they tend to see an increase in spending overall.”

Regional grocery store Hy-Vee took a step to make grocery shopping easier on their customers by offering online ordering where customers can checkout online and either pick up their groceries at the closest store or have them delivered to their home for $4.95.

“We offer the same helpful, friendly service online as we do in our stores,” Amy McCoy, Hy-Vee’s VP of Communications, said.

Hy-Vee launched their online ordering service called Aisles Online in 2015. McCoy said Aisles Online is tailored to fit their customers so they can order groceries while at work and have it ready to pick up when they go home or have it delivered.

This August Amazon closed its acquisition of Whole Foods making their products available both for online ordering and physically in Whole Foods stores. “It’s an admission that the store is still a vital part of the grocery shopping process,” Chris Bryson of Unata said. Between 97 to 98 percent off grocery sales still happen in physical stores.

Others agree that Amazon’s acquisition of Whole Foods validates the importance of physical stores. “It [brick-and-mortar retail] is the key to sustainability in this volatile retail marketplace,” Ken Gold, CEO of Silken|Gold, said.

Not all companies are taking strides to be available both online and in store. More traditional chains have not been so quick to adopt new, online strategies.

“Kroger, HEB, Tom Thumb, and other traditional grocery stores that do not offer a product set that is as unique and differentiated as that offered by Trader Joe’s are in trouble. These grocery stores are just undifferentiated places to buy stuff. Amazon can be this more cheaply,” Alex Doubet, CEO of Door, said.

Grocery stores that sell more specialty items, such as Trader Joe’s, are not as affected if they do not offer online shopping. “Trader Joe’s has a differentiated, and largely wholly-owned, product set to offer consumers. They have unique items that cannot be bought from other stores. This protects them, to some extent, from encroachment by Amazon,” Doubet said.

Another competitive advantage chains like Trader Joe’s have is that their social responsibility. “They will carefully move into neighborhoods where people would rather know where their food is sourced. Their target audience would rather support the local farmer’s market than order groceries online,” Dr. Talaya Waller of Waller & Company said.

With the recent introduction of online grocery shopping, consumers can shop wherever and whenever they want. It is up to grocery companies to stay up to date with trends and right now consumers are moving more and more online.