Last Updated on August 13, 2020 by Rashid Hassan
Today, online grocery shopping might be flourishing because COVID-19 is restricting our interaction in the outdoor world. Pandemic is not the only reason for the growth in popularity of this field. Even before the pandemic, there was a 22% growth in 2019. However, the pandemic pushed up the growth of 5.7% more than 2019 by the end of April 2020. Does this mean that the end of the pandemic will take the growth off?
The Part of Technology
According to experts and market leaders, the online grocery shopping trend will continue, here onwards. Even after the macro and micro effects of pandemic wear off, the technology that we develop during this period to increase convenience during lockdown will boost this field’s growth.
For instance, the pandemic is forcing us to go local, and the local brands now have an online presence to breakeven during this crisis. Thus, soon, every local brand and small industries will offer online shopping experience, safe delivery, fast processing, and better connectivity.
Automation and machine learning created a new realm where an algorithm helps customers buy groceries online faster, better, and safely. The ML and AI advanced the online world to dynamic ads, strategy demand, and supply mapping, faster delivery, and more.
These advancements will continue to help the retailers and wholesalers to offer effective services and competitive prices, even after the pandemic.
Lack of Resistance
The main reason why a majority of the population was struggling to buy groceries online was the resistance to technology. A baby boomer or a Generation X would find it difficult to download an app or shift to online payment. Since the pandemic is already pushing people to overcome this barrier, online purchases will become a habit.
The convenience factor revolving around online purchases will add more loyal customers to the online market. According to the eMarketer survey, previously there was 3.2% of baby boomers shopping online. In 2020, the percent prediction is 5.8%. FMI survey indicates than 10% of baby boomers, and 35% of Generation X will continue to buy food products online even after the pandemic.
Online grocery stores are trying their maximum to bring a variety of products to digital shelves. Some stores are bringing home businesses and local farmers into the online market to satisfy customer demands. Some stores are taking delivery safeties and workplace hygiene as high priority to impart trust. This trust will bring loyalty, which will continue to push customers to buy food products online.
However, after the pandemic, online stores should try to make it easier and comfortable than the in-store experience. The same limited selection of products and limited delivery windows would push customers to buy in-store. According to Bain and Google survey in 2018, 75% of the online grocery buyers are still buying from their first-ever online sellers. Thus, trust is a very important factor in deciding the success of online food products delivery now and in the near future.
The Shift in Population
Generation X is more independent and prefers being independent more than baby boomers. By 2028, Generation X will surpass the population of Baby boomers. Thus, there will be a large population of people who wish to be independent and might be looking for comfortable options because of old age. According to reports from Insider, Generation X spends more than other generations on wine and food. Thus, online grocery stores will see an additional increase in its customer base in the future.
The days of 9-5 jobs are long obsolete. There are very few industries where employees have standard shifts. The rise in service industries and segments related to service industries are shifting the work culture to a more workaholic base. The flexible online grocery delivery and the ability to shop whenever possible pushes the importance of online purchases more.
According to ACI’s report, 39% of its customers preferred mobile wallet payment, and 21% chose other e-payment methods offered by mobile apps.
This change in preference for mobile payments and electronic cash will drive the online grocery delivery business. While the in-stores provide multiple payment options, the options on online stores are enormous, including the COD for skeptical buyers. According to Deloitte’s reports, people prefer paying via phone rather than checkout cash payment.
The future of brick-and-mortar stores
Online food products shopping trend is here to stay. Does this mean the brick-and-mortar stores are so last-century? Is it time to move towards online business rather than setting up a physical store? Well, the studies show a different answer. While online purchases are getting more secure, customers tend to trust websites with a physical store presence.
A large part of the population prefers human interaction and physical examination of the goods. However, to sustain, the retailer has to cater to all major customer segments. It is not the time to close brick-and-mortar stores to open online food products stores. It is the right time to embrace the technology and create an online presence while establishing a decent physical shopping experience.
The online food products stores need not be a million-dollar investment for every retailer or wholesaler. While some companies are trying to create a dedicated website, most of them choose to be a part of a reliable e-commerce platform. Dropshipping, third-party delivery services, and other related industries are just boosting the ease of starting an online food products delivery business.
In our opinion, the online food products delivery business is here to stay. A business’s ability to embrace the online market and still offer the same interactivity and experience as an in-store will decide its future. Here are some of the takeaway points
- Online shopping stores which can handle the demand and satisfy the user experience will stay
- Obstacles that once stood in the way of the growth of online grocery sites are diminishing.
- Large players in the online industry might vertically integrate to accommodate groceries too.
- Innovations via technical advancements, bundling services, and operational flexibility will add more advantages.
What is your opinion about the growth and future of the online grocery industry?