E-Commerce Pairs Convenience with Safety

According to the “U.S. Grocery Shopper Trends 2015” report from Food Marketing Institute, a trade association for food retailers in Arlington, Va., online grocery shoppers were most receptive to buying pet products at 35 percent. And while consumers are buying more fresh produce online, that category of food came in last in the survey at 5 percent. Receptivity to fresh prepared meals or salads was 8 percent.

A 2016 study from Willard Bishop Consulting LLC, a Chicago analytics and consulting company, called “The Future of Food Retailing” finds that e-commerce food and consumable sales are expected to grow at a strong pace of 23.1 percent annually from 2016 to 2020, compared to 0.4 percent for supermarkets. But traditional supermarkets still have the dominant share of food retailing, with $467.8 billion in sales in 2015, compared to e-commerce at $29.5 billion.

Amazon has been offering food and consumables at reasonable prices and the shopping experience is easy and quick, according to the report. But brick-and-mortar grocery retailers are entering the e-commerce space more and more, and many manufacturers like Smuckers, P&G, and Enfamil are bypassing retailers and going straight to consumers via their own e-commerce websites.

Brick Meets Click also says there is some good news for supermarkets because in markets where they have established, well-developed online grocery offerings, they can win a significant share of the online business.

Bricks vs. Clicks

Still, traditional supermarkets are expected to continue to dominate the overall food market. Nielsen’s April 2015 report, “The Future of Grocery,” which covers the market worldwide, notes that “clicks” won’t replace “bricks” anytime soon.

“Online shopping has a number of benefits, but physical stores also have strong key advantages over e-commerce—especially for fast-moving consumer goods,” the report notes. “Aside from the obvious in-store benefit of fulfilling immediate shopping needs without paying shipping fees, there are powerful sensory experiences—smelling freshly baked bread and seeing and feeling the vibrant color and texture of perfectly ripe strawberries—that are virtually impossible to replicate online.”

Just as important for many consumers, the report says, is that they consider grocery shopping fun. Some 61 percent of global respondents to the Nielsen survey found going to a grocery story is an enjoyable and engaging experience. However, the report says it will be important for physical stores to infuse technology in the in-store experience to address service issues like long lines.

The Kroger Co. grocery chain and its Denver-based King Soopers division is one example of a store that has both an online presence with organics and natural foods and goods and technology in its brick-and-mortar stores. Kroger launched KingSoopers.com/LiveNaturally in 2015. Kroger says it is offering more than 36,000 natural and organic products to King Soopers customers in and around the Denver metro area, a test market before it expands the program. According to Kroger, all produce is free from more than 101 artificial ingredients and preservatives that many customers prefer to be left out of products.

“Increasingly, our customers are looking for more simple, convenient and relevant ways to shop, whether it’s in-store, on our website, or on their mobile devices,” Russ Dispense, King Soopers president, said in a statement when the e-commerce website was announced. It also has a click and collection option for customers to pick up products ordered online at local stores.

But Kroger is not just focusing on the Internet. It added QueVision technology to its stores in 2012. It is a technology platform that uses sensors and predictive analytics to give managers real-time data on how many customers are in the store and when cash register lines are becoming long.

Keeping Up Quality with Fast-Paced Technology

But how does food quality and safety fit into the speedy, multi-sourced online food market? According to Hilary Thesmar, PhD, RD, the regulatory requirements for food safety are the same as for traditional grocery store distribution.