While many retailers have yet to come to a consensus on what the future of grocery will look like, they can agree that great disruption is already occurring in the category, and innovation will be driven by consumer behavior and desires. The proliferation of ways and places to shop means online grocers must also compete with the physical appeal of the in-store experience. While online grocery is still in its infancy, it’s quickly evolving as headlines involving delivery and curbside pickup are abundant. According to the Food Marketing Institute and Nielsen, online grocery spending is expected to grow to 20 percent of the market in just six years, and the uphill battle to change consumer behavior has already begun.
Compared to traditional retail, online grocery is unique within the e-commerce realm. There are more items in a shopper’s cart, which means there’s more work to be done when it comes to understanding relevancy, intent and providing a frictionless experience. To stand out from the competition and win shoppers’ business, grocers must make smart decisions regarding their technology investments.
With grocery shopping, many consumers have developed a routine when it comes to buying their favorite dinner, snacks or pantry staples. Just as they would know where these items are located in a physical store, it’s essential that they save time online and can easily find their go-to products. E-commerce sites equipped with a simple re-order option built from previous purchases and advanced search options with autofill suggestions can enable shoppers to add items directly to their baskets from the search bar. Other online features like recipe pages allow shoppers to easily add multiple ingredients to their cart at the same time. By focusing on providing the highest quality product information and search capabilities, grocers can help shoppers easily find products and contextually understand what they’re buying.
Data-Driven Personalized Recommendations
User context is essential to creating superior relevance around personalization. Often, when a shopper searches for an item like “cinnamon,” the first results are products or recipes with cinnamon in them, not just the standalone spice. E-commerce sites must use data to designate the difference between searches like “cinnamon,” “cinnamon desserts” or “cinnamon bread” to provide relevant, intelligent, comprehensive recommendations that create a highly personalized experience for individual users.
Additionally, by taking advantage of and fully understanding shopper search data, grocery retailers can deliver improved customer experiences surrounding routine purchases. For example, as a shopper orders a particular brand of lunch meat over time, e-commerce sites must be able to recognize the shopper’s preference for that specific lunch meat brand and amount, and then move that product to the top of the page. Then the next time they search for “lunch meat,” their preferred brand’s products will appear first, allowing for a much smoother experience and added time-saving convenience for the shopper. Grocers can further capitalize on routine purchases by understanding the cadence at which consumers buy products. For example, a family of six buys toilet paper much more frequently, and in larger quantities, than a college student.
An essential aspect of the brick-and-mortar shopping experience grocers look to imitate online is the impulse purchase. Consumers spend up to $5,400 a year on impulse purchases, and in addition to meeting the need for routine buys, grocers looking to help shoppers discover new items can benefit from improved search and merchandising tools. Recommendations tailored to customers’ past purchase histories can inspire consumers to discover and buy products that aren't on their routine shopping lists.
For example, positioning seasonal foods as special treats or highlighting trending items in a shopper’s geographic location can introduce new products. On an even more personal level, recommending a variation of a frequently bought item, like organic avocados for shoppers with regular avocados on their routine list, provides another avenue of discovery for customers.
Overcoming Grocery-Specific Challenges
Grocery has its challenges when it comes to managing large product catalogs with hundreds of brands that have unique attributes like allergy and religious restrictions. Rich product data can help surface relevant search results, which is essential when it comes to driving higher basket size. While mom-and-pop stores are becoming less common, today’s consumers still expect the same personalized experience from larger retailers. To meet this need, grocers must not only ensure that shoppers can easily find their favorite products while simultaneously recommending new products to them, but they must make it more convenient than a brick-and-mortar store to ensure a repeat customer.
Roland Gossage is CEO of GroupBy Inc, a data-driven e-commerce solution.