E-Commerce as the New Normal

December 4, 2017

Director, Global Insights & Analytcs

Nearly all growth in the retail space is expected to come from digital in the coming years. To help Daymon associates understand the challenges and opportunities its clients are facing, Tara Glerum, Director of Global Insights & Analytics, recently conducted an analysis and presentation on “E-commerce as the new normal.” We sat down with her to learn more about her findings.

RNI: Based on your findings, should every grocer be pursuing an e-commerce platform of their own? Or is selling via a marketplace (like Amazon or Walmart Marketplace) a viable option for private brands?

TG: This is debatable to retailer strategy. We know that a successful private brand program is a key pillar of stability and growth for traditional brick-and-mortar outlets today. Consumers are driven in (on foot or virtually) by known items of quality and value. An online marketplace seems to support other efforts, especially on an international front, in gaining exposure. Those dynamics should be evaluated in optimal effectiveness and reach, so as not to alienate a core store shopper.

RNI: What are some of the more successful e-commerce strategies you see being used by brick-and-mortar grocers in the market today?

TG: The hardest nut to crack in digital is always the last mile. “A box is a box, a bag is a bag” mentality makes it much easier for certain items to transition online than others. Some of the most effective strategies in terms of total growth seem to be click-and-collect type programs. These harness the ease of ordering for the consumer, matched to the ease of delivery at the store by the retailer. They also leave the door open for further impulse buys from an already pleased customer.

We would be remiss not to also assess the merged synergies in Amazon and Whole Foods. Amazon has effectively now set up Whole Foods as its own distribution center, via AmazonLockers, for everything in the e-comm space. It’s a pretty amazing concept, though only time will tell how this partnership affects both shopping environments.

RNI: Some e-commerce programs seem to struggle with delivery and inventory issues. Is it enough to just have an online option? Or do retailers need to deliver something on-par with, if not better than, leaders in this space?

TG: The overriding sentiment seems to be “If you’re not going to do it right, don’t do it at all.” If supply is an issue, a retailer might want to consider a limited assortment to avoid end user frustration. It’s a lot easier to alienate online consumers than brick-and-mortar, given the plethora of availability just a few clicks away.

The online space still holds many questions for both grocers and shoppers alike. Many consumers are still drawn to stores; they wander the aisles, build recipes and ideas, and embrace the environment of seasonality. Digital is a very different space, immune from much of what makes traditional brick-and-mortars a go-to. For today’s consumers, there is place for both platforms to harness their points of differentiation and own the space.