Click & Collect

Sep 16, 2019

Evolution of

Shopping

Our lives are being impacted by advancements in technology. The way we communicate, how we dress, how we shop, what we are buying and even how we entertain ourselves has evolved. We are slowly integrating our daily lives to take advantage of this newly ‘connected world’ we live in.
Shoppers have access to more information at their fingertips and are driving a push for convenience and value. They are now accustomed to competitive price shopping and receiving purchases the same day or in two days if they reside in suburban areas. This social shift has put pressure on retailers to get innovative in how they remain competitive with Amazon and other e-commerce platforms, and thus Click & Collect was born.
We first saw this become successful with apparel as trend setters bought the latest fashion online and opted to pick up in store. Though, as lives become busier and we become adjusted to using technology to augment our weekly tasks, it was a natural evolution to digitalize grocery shopping.
No longer do grocery shoppers need to spend time roaming aisles for dinner ingredients, wait in the checkout line, push around the heavy bag of dog food or transfer cumbersome clunky cans of tuna fish to the cart or even wake the sleeping baby to pick up bananas and milk. We can simply go online, select our items and collect at our neighborhood store. Fast, convenient and easy!

Shopper Concerns

Despite the apparent ease of digital grocery shopping, Americans have been slow to fully adapt to this new way to food shop. Field Agent surveyed over 3,300 primary grocery shoppers in June 2019. According to survey results, the top concerns with shopping for groceries online exist in the cost, quality and value for the shopper.

58%

of respondents worry about product freshness

51%

are concerned with not being able to take advantage of sales promotions

43%

worry about the minimum order quantity and fees associated with buying online

 

Case In Point

The online grocery market is projected to grow to $100 Billion by 2022, according to The Food Marketing Institute.

While digital grocery shoppers worry most about product freshness, a clear pattern has developed around which categories are most likely to be bought online. When it comes to meat, fruit and vegetables, consumer preferences and behavior challenge the notion that Click & Collect grocery shopping is replaceable for all categories. Market research indicates non-perishable, packaged items are most likely to be purchased online and picked up in-store. We see this correlate most in our evolution of digital shopping as we tend to turn to e-commerce platforms to purchase durable goods rather than fresh produce and meat.

Does this mean that Consumer Good Manufacturers selling fresh farm products have no skin in the game? Adopting technology in our daily lives is a slow process and as Americans become engrained with Internet of Things (IoT), incorporating fresh food to our digital shopping list will soon be seen as convenient.

The Wall Street Journal reports that online purchases of groceries are growing around 40% annually and that 66% of primary shoppers expect to be buying more of their groceries online within the next five years. The data suggests that grocery shoppers are optimistic about the benefits of Click & Collect and will regularly buy groceries online as they get used to the idea.

Opportunity

This is an opportunity for grocers and manufacturers to develop a Click & Collect strategy and those who collaborate the most will win in digital grocery. A Food Marketing Institute study says the ability to control inventory management and crunch consumer data are the keys to success in online grocery.

Forward-thinking manufacturers are now reviewing their end-to-end supply chain planning processes, including store-level inventory and order fulfillment to ensure products will be available for purchase. Retailers are reviewing execution plans, including delivery, as frequencies may need to change to ensure stores won’t run out of product before the end of the day.

The challenge for Consumer Goods Manufacturers resides in the frequency, quality and/or lack of data for this grocery fulfillment channel. Many grocers do not yet separate or provide their vendors with this insight and many vendors do not yet have systems and processes in place to support a strategy.

Let’s say you are a pet food manufacturer. Haven’t you ever wondered what percentage of sales for the 50lb bag of dog food was fulfilled Click & Collect? Or maybe you sell consumer paper products. Don’t you wish you had visibility into how Click & Collect affects your shelf days of supply and how that impacts logistics? Or, haven’t you ever wondered if snacks are better sold in-store or through Click & Collect? What would you do with these types of data points? Would you develop a cross promotion with retail partners or adjust your supply plan?

By taking these actions, manufacturers and retailers collectively build a Click & Collect strategy to win.

A New Way

No doubt Click & Collect is disrupting existing processes, though those who are finding success in this space are re-evaluating the way they work together, breaking down silos to develop an omnichannel plan.

Category Managers are now asking themselves: how can I use Click & Collect data to build smarter planograms that serve the in-store shopper and digital shopper opting for curbside pickup? Shopper Marketing teams are now cross-promoting the top 5 online grocery items through digital media channels and tracking the sales impact of the same item purchased in store. Corporate planners are now working with retail account teams to determine the impact of realigning their strategic plan. Click & Collect fulfillment is changing the way we work together.

Forward Thinking

As shoppers are expecting more value and convenience in the way they procure goods, do manufacturers wait to develop their data strategy around Click & Collect or should they start developing that process and system today? In the Field Agent survey, it was also found that 52% of respondents go online to buy groceries and collect through pickup or home delivery. This new competitive dynamic gives consumers far more convenience and at lower cost than they ever had before, proving that digital grocery shopping is here to grow. Those that delay changing their business model to compete in omnichannel will struggle to survive as digital natives spearhead this space.

Interested to learn more?
Atlas has the means to facilitate your omnichannel strategy. With our innovative team of engineers and data analysts, Atlas brings visibility to new data sets and provides manufacturers with new insights to their constantly changing business.

Contact us to learn about our advanced offering and to see just how big of a slice you have in the Click & Collect pie.

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