E-grocery gains momentum: is your brand seizing the opportunity?

As a result of COVID-19, ecommerce has the potential to become an essential grocery touchpoint. How can brands win over new e-grocery shoppers?
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walter caccia

Head of Innovation & Commerce, Insights Division, Italy

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The past 3 months have seen root and branch shifts in consumer behaviour that have transformed every single moment of our lives, from how we eat (at home!) to how we work (remotely) and how we connect with loved ones (Zoom). Perhaps no consumer behaviour has seen as much transformation, however, as the most mundane of all – shopping.

As we progressed through June, online shopping continued to gain strength within the channel mix: according to Kantar’s COVID-19 Barometer, 45% of Italian shoppers increased their online shopping compared with last month, and 42% of all shoppers say they continue to shop at online stores that they first visited during the COVID-19 crisis. Especially in categories where people still very much shopped in offline GDO large scale retail stores, online penetration has increased at a rate the industry hadn’t expected to see for years. According to the recent eGrocery Trends & Strategies report from Kantar and Restore, Flours and Cake Mixes have increased 122% of their penetration in some accounts, while in other categories brand positions were turned upside down as new category leaders emerged.

Prior to 2020, as retailers and brands upped their strategy in trying to engage more shoppers online and gain incremental revenue, nobody expected rapid growth in ecommerce. But things are not “business as usual” anymore. COVID-19 will forever change the way retailers operate day to day, and the immediate impact it had on ecommerce created very tough challenges for brands and companies that nobody could have imagined before the outbreak.

Now it is time for brands that want to remain competitive in the new world of online grocery to be well prepared for the changing paradigms. Although most other industries have experienced a sharp decline and are unable to continue with “business as usual” for a while, the atmosphere with e-commerce has been changed retailer by retailer, category by category, even SKU by SKU. The switching consumer habits will have a positive impact on e-grocery growth in the long term, if brands can insist on investment in online channels and use this opportunity to establish clear ecommerce KPI’s: optimising the marketing mix, raising the ecommerce IQ of the whole organisation, creating online specific strategies, and no longer applying offline management frameworks to online.

Including ecommerce in the strategic view and facing it with the right focus, resources and approach, will give brands a new channel for different and innovative options in their offer portfolio (such as different assortment, packaging and price positioning), while keeping the space from their competitors.

Furthermore, from a brand point of view, ecommerce now has an opportunity in the grocery environment to become an essential touchpoint, going beyond conversion to add value in brand and communication areas. Creating an enjoyable online experience and being supportive of shoppers will help in brand building as well as sales.

Brands need to be ready for the challenge but this must be balanced against an effective offline strategy too. Long term ecommerce growth will also rely on retailer investment and there is uncertainty within retailers about profitability.

While there are many strategies which can help brands to win over new online grocery shoppers, the best approach is being agile, keeping actions simple and focused.

Key take-outs:

  • The competition war will be escalated in online grocery through changing shopper habits and new brand/SKU entries to market: following up closely will be fundamental for brands to keep up with the pace of leadership change.
  • New behaviours / in-home consumption will create new opportunities to be leveraged by brands: serving the right products, communication and services to create positive experience with your brand will be a must.
  • New e-grocery buyers from the pandemic gave the channel a huge boost: creating loyalty towards your brand among these new shoppers will be one of the most important tasks to complete to keep brand share up.

Learn more in this webinar. (Italian)

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