Article

Tomas Granö
Tomas Granö 4 November 2020

Is Grocery The Next Retail Vertical to Undergo a User Experience Revolution?

Online grocery is booming, yet simultaneously creaking at the seams. Unsatisfactory product substitutions are common and some consumers can’t get slots. Does it need to look to its fast-fashion peers to help improve the holy grail of user experience?

Covid-19 is a polarising disease. In almost every sense it divides opinion – from how each government chooses to deal with it through to how it’s affected day-to-day life. Retail has certainly been a vertical in which it has caused opposing fortunes.

Some sectors – tech, DIY and gardening – have boomed, as home offices and renovations have taken off. Sadly others – such as brick and mortar stores or cinemas – have been less fortunate.

Grocery, and in particular the Big Seven retailers, have been at the centre of the storm – weathering what can only be described as a once in a generation buying shift which happened almost overnight. Hoarding, stockpiling, whatever you call it – grocery retailers’ supply chains had to deal with such high demand in such a short period of time, it almost brought the industry to its knees as it was unprepared.

Even Amazon – with possibly the most sophisticated supply chain in the world – could not cope at first; demonstrating how monumental shifts in demand are impossible to cater for.

However, as we enter into a decisive phase, and some of us face the prospect of a return to lockdowns, grocery retailers will be relied on once more to provide a steady online service. The problem is, however, that currently operations are not optimised – in fact, for some, it results in no profit due to legacy technology and poor functionality.

Consumers are suffering with incomplete orders – but for those who can’t leave the house, there is little they can do. No one would stand for this level of service were it a fashion retailer, so what can grocers do to optimise their operations as we move into the golden quarter?

Start With Your Processes

When you think of grocery, you generally associate it with physical retail – i.e. going into a shop. Grocers still think of themselves in this way, and investment in store footprint is higher than online as that’s where the majority of the business lies. However, with online now into double digits, grocers need to invest time and training into online success.

One of these areas is picking. For example, when you get an online delivery, you can’t pick your own fresh produce. From whether you prefer green bananas to overripe, no picker can cater exactly to personal preferences. However, should this be an area of focus?

Shoppers can take advantage of personalised loyalty points buys, so why not let them input their preferences for a select number of items. This will likely drive surprise and delight. Granted it will slow pickers down a little, but considering the satisfaction it could bring to consumers, it’s a way to experiment with UX while making relatively small tweaks to the website.

User experience will also need to focus on those who require the services most – something applicable to most retail and wider services. One ongoing critique of grocers during the pandemic has been the lack of available shopping slots – leaving vulnerable shoppers high and dry. During the height of the pandemic, some retailers such as Boots implemented a queuing system online.

It may be that grocery looks to implement a similar model, by mining customers’ data to provide first for vulnerable or priority shoppers. Admittedly it will not be easy, especially as many systems are built on legacy and were not equipped to handle the volumes being reached. But this is the sort of innovation which could fix many problems quickly. Fashion has undergone many changes in the last two years alone – from payments through to express checkout – now grocery must do the same.

Educate Consumers

Grocery retailers are also facing an uphill battle in other ways – consumer mindset. For example, many object to paying for delivery – yet they are expecting someone to provide a service and then deliver it to them. Retailers therefore should be looking to prove their value more. People need to be prepared to pay and respect margins which can be reinvested into better online provision.

One way to potentially navigate this is to offer wide or narrow delivery time slots. Those who are happy to have a delivery any time between 9am-9pm could pay a nominal fee, whereas those who want a very precise, or even on-demand experience pay more. This could help retailers optimise delivery routes – not only benefiting the environment, but making delivery processes more efficient. The pandemic has changed many consumers’ expectations, so grocery retailers could play on this to help drive a more efficient service provision.

Think Channel Integration

Finally, grocery retailers need to stop thinking separately about on and offline – they need to support each other. Evidence shows that customers that are frequent online shoppers tend to spend double the amount they spend with you online in traditional brick-n-mortar stores. If you lose their online business, you on average lose half of that brick-n-mortar revenue. Grocery retailers need to increasingly adopt a 360-view on customer profitability, rather than looking at channels as independent silos.

Online grocery shopping is only going to keep booming. It’s now worth double digits in the sector and resultantly, supermarket brands need to treat it with the status it demands. This does mean that you need to take a hard look at profitability and efficiency.

In my view, optimising processes – from online functionality to in-store to warehouses, right through the supply chain – is more crucial than ever. So, now is the time to invest and get it right, as all too often excuses get in the way and competitors steal a march. Fast fashion and tech have done it – now’s the time for supermarkets to do the same.

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