Connecting Consumers In Online Grocery
Thursday, November 16th, 2017
Consumers in Asia are embracing technologies that enable them to buy groceries online conveniently, without them having the need to walk to supermarkets to get their fresh produce or other grocery items. By Farah Nazurah
Technological advancements are changing at an accelerating pace and disruption is now the new normal—altering and changing the way consumers do things such as shopping for products. Sik Hoe Yong, managing director, HappyFresh, Malaysia, as well as a spokesperson for honestbee share with APFI their insights into the online grocery market.
Consumers Benefitting From Disruption In Grocery Market
Consumers get to choose from a variety of choices given the multiple online delivery services in the marketplace today. They are accustomed to doing their own research to get the best deal out of every dollar they spend, stated a spokesperson for honestbee. What this means is that with this power shift, there comes a great opportunity for retailers. Those that are able to gather insights from consumer spending habits through online means will be able to close the gap between the smart online consumer and the offline retailer, thus allowing them to stand out in a competitive marketplace.
“Consumers always benefit when an industry is disrupted. A disruption happens when the status quo is challenged and the industry becomes more efficient. As the industry gains efficiency, consumers will be able to enjoy more convenience and competitive prices,” commented Sik Hoe Yong, managing director, HappyFresh, Malaysia.
Online grocery shopping removes the physical barrier for retailers to sell their goods, thus improving retailer’s profit margin. In the short term, consumers can enjoy the convenience at a small cost, and in the long run, consumers will be able to enjoy better prices, added Mr Yong.
Speed and convenience are vital in today’s on-demand economy, and both HappyFresh and honestbee have stated they aim to deliver fresh produce to consumers within one hour. When providing an on-demand grocery service to consumers, it is also essential that companies are efficient and that consumers receive good customer service.
“Good customer service recovery processes need to be in place to ensure that feedback is not channelled into the wrong platforms. In the online sphere—negative experiences with a particular service and brand can easily spiral out of control and sway public opinion,” an honestbee spokesperson asserted. The company also added that quality control is another key factor in the sector as all products need to be delivered fresh.
Logistics Solution For Grocers
Online grocery providers have unique logistics requirements which include ensuring consistent temperatures for the freshest deliveries and a higher number of unique items per order than the typical online shopping purchase.
Technology and logistics are two major components of online grocery. “Developing a technology solution is expensive and requires years of research and development to optimise. On the other hand, establishing in-house logistics requires a huge investment in manpower and supervision,” informed Mr Yong.
“Delivering grocery goods is difficult as grocery goods are often more time-sensitive than non-grocery goods and bulkier than prepared food,” shared Mr Yong. “There is no logistics company out with existing solutions for last mile grocery delivery. We had to create our own in-house solutions from scratch, while at the same time scaling up such solutions to serve more customers.”
Grocers that want to develop a presence in the online grocery scene could partner with companies that already have technology and logistics resources. This way, retailers can have their stores digitally set-up and have their products listed on these companies’ websites and mobile applications, all set up with ease.
Personal Touch In Online Grocery
Online shoppers seek in-person experiences even when the store is miles away, and consumers value how products are packed, and shipped. Grocery shopping is often driven by the experience of seeing, touching, smelling and even tasting products, and this experience cannot be duplicated online.
Consumers' preference to shop for themselves is a hurdle that many online grocery sectors face. honestbee overcomes this obstacle by having their grocery shoppers handpick products and replicating the entire customer’s journey, thus providing a personal touch that the consumer values.
Future Of Online Grocery
In the digital age, time is a commodity and consumers are relying on technology to access products and services faster, and importantly, have better shopping experiences. Online grocery presents opportunities that grocers can harness to grow profitable sales.
After fashion and the food and beverage industry, the next trend which will see huge online adoption is the grocery sector. Mr Yong explains: “Aggressive growth in last mile on-demand logistics will be the main driver of such bloom. Grocery will just be one of the many things consumers e-shop for.”
“Five years from now, most second-tier cities and even some townships will be able to enjoy such convenience as companies further overcome logistics limitations. Consumers will also be more receptive to such service. Based on current growth rate, the online grocery market will be at least 300 times the current size,” anticipated Mr Yong.
Constant urbanisation and high population density coupled with booming smartphone ownership have also led to increased mobile commerce opportunities, declared a spokesperson for honestbee. The company foresees a great demand from millennials in the near future as many of them will be starting to form their own households and families soon, and these time-pressed individuals will value the variety, convenience and quality.
Food retailers can take advantage of digital technologies as well as partner with online grocery delivery platforms that already have a technology and logistics infrastructure in place; this way they can continue to remain competitive and scalable in this digital era.
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