Food and Beverage being one of the biggest sectors in India accounts for approx. 14% of sales through e-commerce. Buying groceries online was not as popular as buying electronics, toys, and other items. But during the COVID-19 lockdown, things have taken a U-turn, and as people have started to adjust to the new normal the demand for online grocery delivery services has started to become more and more popular.
As per the Institute of Grocery Distribution (IGD), online grocery sales in the world’s two largest markets viz China and the United States will increase by 181 billion USD over the next 5 years. By 2022, China’s spending on online groceries will be tripled accounting for 11 percent of the overall grocery sales, while in the United States it is expected to be more than double within the same period. So, online grocery shopping is here to stay not going anywhere soon.
Even with such favorable market developments, many retailers are still reluctant to invest in an online channel. Without a doubt, the perceived cost and complexity is a sticking point for some, but there are many misconceptions about selling groceries online. Online grocery has great potential but people who have never ordered or brought groceries online are very much doubtful and much of the doubt lies in the wrong information and false beliefs. Here are the 5 online grocery shopping myths that one must stop believing.
Myth 1: Online retail is cannibalizing in-store sales
- During the lockdown, many people have become more technology savvy and since have changed their way of purchasing groceries which has inevitably led to channel migration. As a result, a number of retailers have witnessed an upward trend in revenue when considering online as a purchase channel.
- For most of the retail industry, omnichannel is now the new standard and channel migration should not be seen as a “cannibalization” of in-store sales. Instead of thinking in channel silos (e-commerce vs. in-store), retailers need to think about omnichannel strategies to maximize their overall market share as consumers today are increasingly agnostic and traditional retailers face the risk of losing out to pure e-commerce players, many of whom are now expanding their off-line presence.
Myth 2: People avoid ordering fresh fruits & veggies online
- It is one of the most common myths rather than a generic statement that one must have heard from traditional grocery retailers as they believe online grocery will never take off at scale.
- The assumption is that many people hesitate to buy fruits and vegetables online because they want to touch, feel, and select according to their choice. To tackle this problem many retailers have found a way to provide high-resolution images of their products with some even having shoppers talk with pickers of in-store products to ensure that they get the right range.
Myth 3: Online buyers are bargain hunters
- It is easy to believe that shoppers are always searching for the lowest prices in the online market world where brands and sellers are encouraged to compete on the cost to push demand through the network (often a race to the bottom). Although this may hold true for some types of items, such as non-food / general goods.
- Studies show that customers make choices based on the perceived total benefit which goes beyond price including convenience, assortment, and shopping experience of where they shop.
Myth 4: Only tech-savvy and millennials people order groceries online
- It is a common perception that online shopping is majorly done by the younger and tech-savvy millennial segment, with older shoppers not participating in the channel. An industry analysis conducted by KPMG in 2018 found out that buyers of Generation X actually made 20 percent more purchases than their fellow younger counterparts.
- The assumption here is that there is a shortage of demand from the general public for online grocery shopping is far from reality, poor customer service is often the cause that hampers the demand which results in poor supply.
Myth 5: Real-time inventory is needed
- Real-time is not one of the main factors that ruin the online shopping experience if retailers are able to provide the best alternatives based on the extensive understanding of their customers.
- The fact is that retailers can no longer afford to disregard online groceries. Due to factors such as population density, disposable income, and consumer nuances, it will play out differently in every industry, but the value at stake is high and the market will continue to develop.
- Early movers could gain a significant incumbent benefit, but only with an excellent omnichannel value proposition, a relentless emphasis on maximizing profit, and ongoing innovation.
- As many retailers are aware, table stakes are to consider the current and potential needs of consumers and to tailor the shopping experience to suit them. The good news is that every retailer is now within reach of the knowledge, instruments, and expertise that these pure-play distributors possess.
These myths have been holding back the growth of the online grocery industry, but it is seen to bounce back from the doldrums and things are shifting. Grocers can easily implement an online solution by partnering with an experienced e-commerce service provider(s) who will help them develop new businesses and improve relationships with existing customers.