How Retailers Can Compete With Tech Companies That Sell Groceries

There's a rising trend for technology companies to invest in the grocery space, with Amazon.com's acquisition of Whole Foods in 2017 being the most dramatic indicator of this. The acquisition gave Amazon the brick-and-mortar presence it needed for minimizing returns, making delivery easier and maximizing marketing, and it gave Whole Foods a national network for fulfillment and purchases. So what can a smaller, regional grocer do to compete against a giant like this? A digital presence is increasingly essential when it comes to helping grocers stand out, build brand loyalty and own their digital experience. When building such an experience, grocers should consider the following tactics:

1. Offer shoppers a seamless e-commerce experience.

Technology companies that happen to sell groceries have one thing in common: digital online platforms. To reach parity, regional grocers should ensure they offer a seamless e-commerce experience that allows shoppers to select from a variety of fulfillment options. Processing customer orders is essential, but grocers should also consider adding the ability for shoppers to log in to accounts, select items from digital flyers, and schedule pickup times to create an enhanced digital experience.

2. Engage shoppers throughout channels.

Digital engagement is all about engaging shoppers as relevantly and personally as possible across multiple channels. After all, shoppers aren’t just interacting with retailers on e-commerce sites, they're also looking to engage via email, social media and mobile apps. Big technology companies are creating holistic experiences across channels; regional grocers must do the same.

3. Connect with shoppers personally.

While large technology companies may have access to vast amounts of highly varied data about their customers, regional grocers can create an equally personalized experience with the data they have access to. Grocers’ digital platforms should tailor content for each and every shopper by tapping into implicit and explicit data, including purchase history, dietary preferences and household demographics. Grocers should consider adding personalized banners to websites, recommending recipes based on preference, and serving up personalized coupons to shoppers.

4. Allow shoppers to select from multiple fulfillment options.

High shipping costs and lack of delivery options are common reasons shoppers abandon their online carts. Kroger rolled out its “ClickList,” Target offers “Drive Up” and Whole Foods launched curbside pickup to address these issues. Grocers should offer click-and-collect as a fulfillment option to enable customers to shop online or via a mobile app, set up a pickup date and time, and visit the store to collect their purchases when they want. Similarly, retailers can consider providing customers with last-mile delivery by partnering with companies that specialize in this service. By offering a variety of fulfillment options, grocers are ready for success, even against big tech companies.

5. Own the shopper experience.

As grocers build digital solutions to reach parity and drive loyalty, they should ensure they have full ownership of the solutions they create. Regional grocers that have found success have done so by building lasting, trusted relationships with their customers. Fortunately, digital technology can allow grocers to be the trusted solution throughout the entire shopper journey.

Sylvain Perrier is the president and CEO of Mercatus, a leading provider of digital commerce solutions for grocery and other retail verticals.