In an age in which we buy almost everything online, from furniture to small vehicles such as cheap fixie bikes, there is one area that has still not completely digitized – the food market seems to be one of the most persistent stationary industries. However, that should change in the next few years – by 2020, the market share of online food sales is expected to increase to 10%, according to Ernst & Young.
Challenges – maximum comfort at a low price
For customers, the main reasons for buying food online are the resulting flexibility, direct delivery to their home, and a large selection at affordable prices. On the other hand, the fact that they are satisfied with brick-and-mortar shopping speaks for almost 66% of consumers. However, because of many people live only about seven minutes from the nearest shop. Furthermore, customers are discouraged by the fact that they neither see nor touch products and therefore cannot assess their quality.
Logistics is also one of the central challenges for online supermarkets. On the one hand, this must meet the product requirements in order to bring easily perishable products such as fruit and vegetables or frozen goods to the customer without damage. On the other hand, the high demands of potential online food buyers must be met – delivery should be as quick and, above all, inexpensive. 87 percent of customers want delivery on time and 74 percent want same-day delivery. For delivery on the same day worth € 50, customers are willing to pay an average of € 3.17 shipping costs (source: Fact Finder ). This is also one of the reasons that Amazon launched Amazon Fresh was hesitant in Germany.
One solution to work around the logistical problem is click-and-collect. Customers can put together their purchase online and collect it from the nearest supermarket. Especially for food retailers with an existing branch structure, the additional effort is considerably less. The concept is currently being tested by the Lidl supermarket chain, for example.
Information and content as an opportunity
Even if there are still some hurdles to overcome when selling food via the Internet, eFood retailers also have opportunities that can mean an advantage over brick-and-mortar retail. One advantage is that products are easier to find. While you often walk around the supermarket for minutes to finally ask an employee where something is, you can easily search for it in the online shop. Products can also be filtered according to ingredients or nutritional preferences. For example, the entire organic range, gluten-free or vegan products can be issued with a click.
In addition, effective personalization concepts can be implemented online based on customer preferences. For example, if a customer often buys organic products, they will be suggested more often in the future. Based on the shopping behavior, each customer can be offered an individual shopping experience.
Furthermore, high-quality content is available for eFood retailers in order to create added value for customers and to compensate for the problem of missing haptics. In the shop, customers can be offered a comprehensive product description as well as a list of ingredients and nutritional values at a glance without having to touch each product individually, as in brick-and-mortar stores. However, additional digital additional services can make the difference to the supermarket around the corner.
What the future brings
Online food retailing will continue to pick up speed, that’s for sure. It is very likely that logistics will achieve a higher level of automation in order to meet the requirements for flexibility and fast delivery. And – even if there are still logistical challenges at the moment – Amazon Fresh will continue to provide the market with various food online from Asian food to Italian food. There are creative concepts in online food retailing: some deliver with electric cars or bicycles to protect the environment, others offer a comprehensive range for all forms of nutrition and still others use the opportunities to address customers via meaningful content. However, shops with a comprehensive package are missing. The classic supermarket is often simply transferred to the online world without exhausting the possibilities offered by the digital world.
Food shopping has to be mobile
Mobile food shopping is also not yet the focus of online groceries. But the straightforward ordering via the mobile device can be a plus in the race for the top ranks in the eFood market. Our white paper “Success in Mobile Commerce, Optimization and Best Practices” gives shop operators the ultimate tips on usability and optimization of the mobile shop.