Grocery stores are the most important purchase channels for the purchase and sale of food items worldwide. Both grocery retailers and stores have taken on a coordinating role in the food retail industry, which creates substantial influence on daily consumer practices. With the introduction of a recent disruptive development in The Netherlands, Picnic, the traditional practices of grocery shopping are about to change. Following up similar succesfull innovations in other countries, such as Amazon Fresh, it is very unlikely for companies like Picnic to fail in the market.
Online grocery shopping provides consumers with many benefits. First, it saves them time. Furthermore, it offers more convenience and freedom to the customers, since you can shop for groceries online anytime and anywhere. Grocery shopping is seen as a burden, since most consumers find it a boring and repetitive process. Second, less food is being wasted as grocery stores can make more accurate predictions of demand by using real time data and algorithms. In addition, with more and more people using the service over time, it is likely that it will lead to positive network effects. Current grocery stores that offer online grocery shopping do not offer all their products online yet, however, with more customers ordering online they will quickly expand their online offerings. A wide assortment will then create more value for the customers.
However, although convenience is important, consumers are not willing to compensate on price, quality and assortment. If online grocery stores are not expanding or at least meeting their expected standards, consumers will continue to shop in the traditional physical stores. If online grocery stores do manage to meet these expectations, more and more people will make the transition to online grocery shopping since traditional grocery shopping will not offer any extra benefits to the consumers anymore.
Perhaps there will be no physical grocery stores in the near future at all?
Galante, N., López, E. G., & Monroe, S. (2013). The future of online grocery in Europe. McKinsey & Company, 22-31.
Hi Justina,
Thanks for your blog!
I do agree with you saying that online grocery shopping will be adapted by more and more people in the future. Although I think that customer expectations are much more complex in an online environment. Moreover, I think that negative experiences (e.g. incorrect delivery or bad products) have more impact than in an offline environment. Hence, new entrants like Picnic should focus greatly on listening to the customer voice if they wish to become a sustainable company. Current offline grocery stores will also shift more and more to an online environment, with the advantage of having more data than a new entrant. So in my opinion, the real battle is still to be fought.
Nice topic! I’m a real fan of Picnic and use their service on a daily basis. It really saves me a lot of time. However I wonder, what it would mean for traffic if physical grocery stores stop existing and if everyone orders their groceries. Nowadays, it already happens very often that I need to wait with my car, beacause the road i blocked by an Albert Heijn thuisbezorgd vehicle.