Grocery shopping has changed drastically in the last few years, especially in light of the COVID-19 pandemic. Customers shop less and utilize online tools more than ever. This shift puts regional and independent grocery retailers at a disadvantage. How can they compete against big box stores online and e-commerce tools?
The data shows that smaller grocery chains are struggling to compete online. According to Brick Meets Click’s eGrocery Performance Benchmarking report released in Dec 2023, regional grocers saw a 13.5% drop in online sales for 12 weeks ending in September compared to last year. There are two things this data tells us. One is that online sales are down for regional grocers compared to last year. The second item we learn is that they are down compared to last year when COVID-19 was still a more pressing concern, and people were being more cautious about reducing transmission.
Considering these two realizations, while regional grocers can surmise that their online sales are down a bit, they are down compared to an inflated standard during a global pandemic. It could be that now that online retail isn’t such a pressing need for many people, they have returned to in-person shopping instead, which could be good news for smaller retailers.
Despite the drop we saw in the report, online shopping tools are here to stay, and regional grocers must be willing to offer them to their customers. It’s an expectation now. But there may be a way that regional and independent grocery retailers can still compete in the online grocery world – customer retention.
Online grocery ordering has made it easier for customers to jump from store to store to get the desired goods and services. They can shop online and easily compare prices. This is where smaller retailers face the most competition against big box stores. If a customer doesn’t like the price at a smaller store, they look online at another store’s price. So what can smaller stores do to retain their online customers and compete? We have a few ideas.
- Offer value to long-term customers. Long-term customers are willing to spend more with the stores they like. This is an advantage independent and regional retailers have over big box stores: more loyal customers who enjoy their products and personalized service. The data from the benchmarking report confirms this, with long-term customers making twice as many orders compared to new customers and at a 30% higher value. Smaller retailers can capitalize online on their current loyal customers with membership discounts, loyalty discounts, or sales that reward long-term customers.
- Personalized service: Online tools that allow customers to personalize their shopping experience are just as valuable to smaller grocery stores as your employees saying hello to customers in the store. Make sure that your online store has these tools built in and that it is easy for your customers to use.
- Bring the online deals in-store. Another way to increase customer loyalty at your store is to offer promotions that work online and in-store. This keeps the whole shopping experience cohesive for your customers and makes it easy for them to switch between in-person and online shopping.
Online shopping is here to stay in the grocery world, and independent retailers have to be willing to embrace these tools. We are here to help if you are a little late to the game. We have affordable and easy-to-use solutions that can help you compete. Contact us today to learn more!https://services.unfi.com/
