There’s going shopping, and then there’s doing the shopping…
The $189 million funding round just completed by FreshDirect, a leader in online groceries distribution in New York, New Jersey, Pennsylvania, Connecticut and Delaware, has prompted speculation about our changing shopping habits.
The operation, designed specifically to expand the company’s operations into other markets, comes after the recent acquisition of Jet.com by Walmart and Amazon Fresh’s spurt of growth, and meets the preferences of a whole segment of the population that has abandoned the idea that certain products should be bought in store: a generation of people who have only had good experiences with online buying, and trust in electronic commerce because of a generation of online companies that operate a money back, “no questions asked” policy.
The level of knowledge of certain products also leads to a transfer of trust or a specialization: most people I know would not be able to choose with confidence a certain cut of meat or a piece of fruit, leading them to trust the information they receive from the person who sells it online or in person, while others only buy wines online because they enjoy the experience more, saying the range is better, there is more information and prices are lower.
These changing habits clearly reflect a shift in how we live. Today’s generations love buying stuff experience, but hate doing the shopping, seeing it as boring.
Distribution per se isn’t about to die, but is changing radically. Unless the experience of buying something is fun, we want the product delivered to us.
Take the weekly groceries: most of us would prefer them to arrive in a cardboard box, rather than spending time wheeling a trolley up and down aisles looking for bargains. The only time we might want to go into a store is to buy some gourmet or specialty product, receiving advice from the store owner or clerk.
Companies that are not able to understand this, that cannot provide added value, will see their market share reduced as part of this generational phenomenon. I’m not talking about a fad, but a change of habits that makes all the sense in the world. The role of the customer in the distribution chain is coming to an end: why would anybody spend two or three hour of their life driving to a store, wheeling their trolley up and down, standing in line to pay, then loading up their car and then driving home and hauling bags of groceries up into their apartment and then unpacking it if they could get somebody else to do it at no appreciable extra cost?
The reasons why some of us haven’t caught on to online shopping is largely to do with inertia, or because we think it’s more expensive, along with other misplaced ideas. But it is only a matter of time before we all see the light.
If you don’t live on the east coast of the United States, chances are you won’t have heard of FreshDirect. But when you about a company raising $189 million that builds on acquisitions and steady growth, you should know that change is afoot.
(En español, aquí)
