Does Online Grocery Retailing Have a Future?

Businesses continue to design new ways to change consumer habits when it comes to grocery shopping. There's been no shortage of effort devoted to increasing online grocery sales but this segment only accounts for between 1–2% of total industry revenue.  A recent column in Internet Retailer covers the salient aspects of e‑commerce and grocery stores and the results of the analysis should be encouraging to ad agencies looking for new business opportunities.

Author Mary Wagner reminds readers that price cannot be the differentiator for vendors seeking success in online grocer operations. Instead, she encourages vendors to compete on:

  • Convenience
  • Web-​based shopping
  • Web-​based planning tools
  • Selection

Wagner also points out that grocers can attract shopper interest by expanding planning tools beyond the traditional shopping list.  Meal-​planning tools that allow shoppers to find recipes that meet specific dietary requirements and then automatically build a shopping list are increasingly popular.  This type of tool may then prompt a consumer visit to the store or an online order. At the same time, stores can collect shopper information to use for future promotional campaigns.

At least one industry expert cited in the article emphasizes that online capability for grocers is currently best suited for advertising and promotion.  Until more shoppers embrace e‑grocery shopping, it seems that an agency with Web-​site design and online marketing strengths could help clients connect with consumers in new ways.

[Source: Wagner, Mary. Supermarket Sweep, Internet Retailer, September 2008]
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.