Will Food Ecommerce Ever Catch Up to Online Retail?
Regardless of ecommerce niche or sector, customers value convenience—a concept that’s always trending toward greater ease and immediacy. We live in a world in which even standard shipping now seems “slow.” Customers are increasingly impatient for the goods they order online to show up on their doorstep or at a designated pickup location. Merchants able to keep pace with customer demand have a better chance of thriving in this marketplace full of shifting expectations and shorter order fulfillment windows.
This is especially an imminent challenge for retailers selling groceries. Will food ecommerce ever catch up to online retail? Let’s take a closer look at some of the hurdles merchants face in selling food and how some online stores are adapting to increasing customer demand.
Challenges Associated with Food Ecommerce
According to one report, online grocery shopping could “grow five-fold over the next decade,” meaning U.S. consumers could spend more than $100 billion on getting food delivered to their homes by 2025. The staggering potential of this type of ecommerce is thanks in part to millennial shoppers’ increased willingness to buy groceries online. To put this in perspective: online sales in 2016 equaled 764 grocery stores. The 2025 share could be closer to 3,900 stores—representing a rapid ascent in the overall potential of the online grocery business.
But as it stands, merchants face certain challenges on the path tofulfilling customers’ wants and needs when it comes to ordering groceries online. These include:
- Logistics of delivering food: Merchants must figure out how to get food, even perishable and delicate items, to customers safely and in a timely manner.
- Additional labor & costs: Online grocery shopping often necessitates employees performing tasks like pulling items from shelves and packing deliveries.
- Already-thin ecommerce margins: Same-day delivery adds costs for grocers, which erodes already-thin ecommerce margins. This may lead to grocers having to pass on costs to consumers both online and offline.
In order for food commerce to truly catch up with other areas of online retail, merchants will have to address these challenges head-on and find a business model that’s sustainable for everyone involved.
Considerations for Ecommerce Merchants
What are ecommerce merchants currently doing to facilitate more seamless online food sales? Walmart is making dramatic changes to its website for the first time since 2014 for a variety of reasons. However, their spokesperson notes that “the website would soon have different layouts depending on product categories, allowing customers to shop for groceries differently from how they buy clothes and accessories, or home improvement products.” All in all, the retailer is moving toward an increasingly personalized ecommerce experience for customers depending on factors like location and type of product sought.
Whether merchants are selling groceries or gadgets, one thing is clear: convenience is key. Factors like enterprise ecommerce software dictate the overall shopping experience, from site design to navigation, checkout and more. Basically, retailers of any type—food or otherwise—must make sure their website facilitates a user experience in line with customer expectations.
It’s also worth noting that physical sales used to depend more heavily on shelf space and point-of-sale marketing. Online, search engine optimization (SEO) is now key for bringing your store to top of mind for consumers. This gives lesser-known brands and sellers a chance to compete in online markets like food, as site traffic depends on capturing website visitors at the top of the funnel based on what they search online.
Will food ecommerce ever catch up to online retail? Likely yes. But brands who wish to carve out space in this market must be ready to adapt quickly.