When we were little, it was very common to join your mom on her trip to the supermarket. Nowadays, we can order almost everything we need online. We love to buy shoes, clothing and electronic devices online. But how about groceries? Why do we still go to the supermarket and drag around all those heavy bags? Is the future of the grocery shopping found in the online supermarkets?
In recent years, technological disruptions made it easier for customers to shop their groceries online. The mobile devices and technologies have been improved, which causes a lot of retailers to adapt their strategies. The rise in popularity of companies as Amazon and Wallmart are the living prove for this.
This online-shopping hype, also goes up for supermarkets. In the Netherlands for example, established supermarkets such as Jumbo and Albert Heijn have adapted their strategies and have made it possible for customers to order their groceries online. Why? Online supermarkets make consumers life a little easier. They try to save their customers time, money, gas and inconveniences by delivering their groceries (Forbes, 2015). Even though this sounds like a great idea, the online grocery market in the Netherlands only has a market share of 1,3% in 2015 (nu.nl. 2016). The main reason for this relatively low percentage, might be that customers don’t like to pay service costs related to the delivery of the groceries.
You could say, that the market is screaming for a disruptor in this industry. Luckily, I think that a disruptor has been found in the Dutch market. In September 2015 Picnic supermarkets started operating. This supermarket is an app-only supermarket, that delivers groceries to your doorstep for free, if you buy products worth of €25,-. On top of this, the supermarket has a lowest price guarantee and if you order before 22:00 pm, you get the groceries delivered the next day. It must be no surprise that this company is growing at an exceptional level and that it seems that customers are starting to get used to the idea of online grocery shopping. So what do you think? Are we going to buy all of our groceries online in the future? Or, in ten years from now, will we still be taking our kids by their hand to the supermarket.
References:
http://www.nu.nl/ondernemen/4084811/omzet-online-boodschappen-fors-gestegen.html
Step by step, physical grocery stores are becoming back ends for online shopping
http://www.retailwatching.nl/formules/artikel/7XX_5hbtRT2JmYO4U3CyXA-10/drie-redenen-waarom-picnic-het-wl-gaat-redden.html
http://www.forbes.com/sites/thehartmangroup/2015/06/17/whats-the-future-for-online-grocery-shopping/#4a4c34397cff
https://www.picnic.nl/
Thanks for bringing up this topic. Having worked in a supermarket, I’m curious how this market will develop.
From my personal experience, I have come to notice how the current customer still values going to the supermarket over shopping online. The main sentiment I heard from customers, was that they want to feel, smell, touch or just sense the product they buy. Food, obviously, is a very different product from, e.g., clothing or electronics. Food goes into our body, and I think therefore the customer is more cautious of the transition to online shopping for groceries. Actually, this is also what the editor of a research on the future of supermarkets and fresh foods expects. It is expected that supermarkets will turn from ‘trolley filler shops’ into ‘top-up’ shops, where people come especially for their fresh products because they want to experience the freshness of the product.
Nevertheless, supermarkets and grocery shopping will change. As more and more household electronics get smart, our fridge might be alerting us when running out of milk or when your steak is nearing its consumption date. Another direction we see coming up is the enhancement of the total shopping experience, as Jumbo has opened a huge supermarket in Breda sporting restaurants and live cooking-classes. It is expected that cashiers might vanish and we’ll see cooking demonstrations and cooks as replacements. I’m curious what will happen!
http://www.bodyandsoul.com.au/health/health-news/5-ways-supermarket-shopping-will-change-in-the-future/news-story/03becb4588b103022acfba28fc7c8e24
Picnic is an exciting new innovation in the Netherlands! Personally, I believe in the online grocery supermarket industry as in today’s world people are always busy and have little time to go out to do groceries. Successes such as HelloFresh represent the consumers need for online door to door solutions to the every day struggle of having no time but needing products and meals at home. Furthermore, by having an account, Picnic, can gather data about its customers and personlize their customer journey by recommending product suggestions when the customer returns to the platform, increasing switching costs, and customer retention rate. This will also increase customer satisfaction as the customer will save even more time.
Moreover, as products are shown online, the ability for Picnic to add more nutritional information to each product description will increase the informedness of customers leading to a decrease in product uncertainty. This can be an opportunity for brands to cooperate with Picnic as customers become more product aware. Through online filters, Picnic can enable customer to find the “right” products for them based on their preferences.
Picnic is a great initiative, however there are certain dangerous competitors in the market such as Alberthein, Jumbo and Plus. Hence, it should remain innovative and differentiate themselves from the others. An idea might be for Picnic to expand it’s platform to combining the strategy of HelloFresh with an online supermarket by providing daily recipe’s together with the needed ingredients!
Hi Florine, thanks for this interesting read.
Some time ago I read an article in a Dutch newspaper called De Volkskrant by Marc van den Eerenbeemt and Pim Pauwels on this topic. The article stated that ‘online’ is winning territory in the supermarket industry. It is mentioned that the Netherlands is the country with the most supermarkets per square kilometer in the world, however, the amount of people that decides to shop online is growing rapidly. The Smart Food Monitor predicts that 2 million people will have tried out online shopping in the upcoming year, increasing the market share to 5%.
Picnic is mentioned as a development that makes the current physical supermarkets nervous. Where physical supermarkets have to decide whether to invest in online and take revenue away from their physical locations, Picnic can concentrate fully on the new strategy.
I think that the online grocery shopping industry will continue to grow since many people see how easily they can order online, not to mention the large assortment they can choose from when ordering online.
Since I forgot to mention the source:
Eerenbeemt, M. van den., Pauwels, P. (2016, 23 September). ‘Online’ verovert ook supermarkt. De Volkskrant, p. 3.