Driving Value with Digital: The State of Omnichannel Grocery in 2021 and Beyond

The 3rd Annual Grocery Digital Maturity Benchmark from Incisiv projects that by 2026, 81.7% of consumers will be buying groceries online. It shouldn’t come as a surprise: From the onset of the global pandemic, the already predominant trend of digital grocery skyrocketed in popularity—and necessity—among consumers. With the demand for digital sticking around, retailers must confront the challenge of omnichannel consistency, variety, and velocity—all while continuing to innovate. Among swift retail competition and staggering labor shortages, the task is not an easy one. Because while some digital capabilities have certainly evolved, grocery still has considerable progress to make when it comes to fully rising to consumer expectations.

 

In a webinar hosted by Winsight Grocery Business last Thursday, Amarjot Mokha, Co-Founder & Chief Operations Officer at Incisiv, and Steve Paro, Chief Product Officer at ADC discussed the 3rd annual report and offered expert insights into the current needs and future innovations of omnichannel grocery. 

 

Omnichannel fulfillment “should be a major area of continued investment,” says Paro. “Retailers really need to have a plan.” Consumers anticipating the convenience of transacting online is not the only reason high-quality omnichannel is a must: The digital maturity showcased by standout retailers shows high correlation to revenue growth. Incisiv’s benchmark shows leaders experienced about five times more growth compared to laggards. 

 

The data showcased in the report is broken down into four main categories: Search & Discovery, Seamless Ordering & Checkout, Convenience of Placing & Receiving Orders, and Customer Satisfaction & Issue Resolution. Each category boasts retail leaders and expounds upon trends, highlights, and lessons to learn. 

 

Digital Maturity Benchmark

Search & Discovery

Optimization of search and discovery capabilities is the first step to digital success. “Make that search and discovery easier for the customer,” Mokha implores retailers. “That’s the entry to the buying process.” Reducing time spent in the search and discovery phase means a more satisfied customer: the longer a shopper spends searching for exactly what they want to buy, the more frustrated they become with the process. As retailers look to innovate search and discovery, personalization and specialized filtering are top priorities. Creating filters for dietary restrictions can let shoppers search only within products that match their lifestyle. Other advanced search capabilities may involve searching within a shopping list, viewing stock availability, and stipulating mode of fulfillment and delivery time.

 

Paro also stipulates that retailers should plan on “a strategy for having better representation of their fresh categories as part of their online assortment.” Ready-to-eat meals saw surging popularity in grocery stores as a result of the pandemic, when meal dollars were redirected from restaurant dining. Incorporating fresh-made items into the online equation is a challenge with a high-value outcome. 

Seamless Ordering & Checkout

Speed of checkout is the next most critical aspect of the user experience: Incisiv found that on average, 69% of shoppers abandon the cart due to a poor checkout experience. What makes them stay? An expedited one-screen checkout. Supplementing that experience might involve an option to add-to-cart directly from product recommendations and product substitution recommendations. Personalization also plays a growing role in how easily—and successfully—consumers checkout online: Personalized search parameters and relevant personalized lists will make the ordering process personal while saving time. For example, AI tech might work to pre-populate a user’s account with shopping suggestions or carts from previous orders. Come payment, including digital currency options like Apple Pay, Paypal, and SNAP EBT is another key accelerant to the online checkout experience. 

Convenience of Placing & Receiving Orders

The pandemic forced grocers to hone in on both delivery and pickup systems. Both avenues present myriad challenges—as well as opportunities. The experience can be immediately eased by allowing shoppers to choose a delivery slot before filling their order, and eased after the order is placed by allowing shoppers to share “on the way” or “at the store” status for pick-up. In a race to be the best quality and fastest delivering retailer, many have begun offering highly expedited fulfillment (2-hours, one-day) and contactless delivery. Some retailers have even created delivery membership services to reduce the overall cost of delivery for shoppers not interested in or able to utilize in-store or curbside pickup. Reserving online and picking up in-store—as well as the option to pay in-store—also seeks to expand the convenience of placing an online order for consumers looking to avoid the hassle of in-store shopping. 

Customer Satisfaction & Issue Resolution

Before, during, and after the online ordering process, customer service remains a touchstone of brand viability and consumer loyalty. Engaging shoppers through personalization is a must moving forward with online services. Many grocers have put customer accounts online, allowing shoppers to view loyalty program perks and points, create and repeat online orders, and easily discover personalized recommendations. 

 

The era of customer data is here to stay; leveraging data to better the experience of the customer is the most valuable way to make use of personalization when it comes to online ordering. Some retailers have also started integrating personal assistant features such as live chat to answer consumer questions or concerns during the online ordering process.  

Digital Grocery Priorities: 2022 & Beyond

If Incisiv’s 3rd Annual Grocery Digital Maturity Benchmark makes one thing clear, it’s that digital drives value. Retailers coming out as leaders in one or more of the four main omnichannel categories offer foolproof evidence of surging revenue and customer loyalty. 

 

So where does digital grocery go from here? Mokha shared a few stand-out  future priorities for retailers:

The initial investments in technology by leading retailers have clearly paid off: now that front-end capabilities are in place, it’s a matter of realigning on an operational level. Paro suggests that a good step forward might be a step back: “Let’s understand now how we’re leveraging the technology that we’ve invested in from an operational perspective, so we can have a consistent use case across all of our stores….use cases can vary greatly, and therefore results can vary greatly. So I think having a strong operational plan [going forward will]...be imperative.”

  • Enhance digital capabilities: Search and Discovery, customer service, and personalization

Though retailers have come a long way in these omnichannel categories, there are still gaps to bridge. The ordering process should become a full-optimized journey, start to finish: From what a consumer inputs in Search and Discover, to the personalized suggestions and coupons they find while ordering, to the live chat guidance they receive when they run into an issue.

 

  • Relationship roadmap with third-party providers

Retail relationships with third-party providers can be complicated. In terms of profitability, it’s a thin margin when assessing the need to outsource services like delivery, or own in-house solutions. Paro is of the mind that owning should trump outsourcing: “There’s no doubt: [Online grocery] is here to stay. Owning your own program, owning your own data...that’s got to be something that retailers are focusing on over the next couple of years.” 

 

In terms of future challenges, labor clearly remains a high concern when it comes to maximizing omnichannel. “[It] is going to continue to be a problem,” Paro acknowledges. “Moving forward we’re going to need to start looking at flex-labor solutions.” Leveraging AI solutions to meet labor ends may also become key to achieving profitability goals as the impacts of the pandemic on supply chains and revenue subsist. 

 

In the current competitive landscape of omnichannel grocery, retailers can innovate and trend-track all they want—but without a cohesive omnichannel ecosystem, friction remains. Thankfully, there’s a wealth of data and forecasting from the top omnichannel retailers to track where a retailer fits into the race for digital maturity. 

 

Register to view the full, free webinar here.

Webinar speakers:

 Amarjot Mokha: Co-Founder & Chief Operations Officer at Incisiv
Steve Paro: Chief Product Officer at ADC
Jennifer Strailey: Editor-in-Chief, Winsight Grocery Business