At a recent IGD conference exploring the future of online grocery, 320 delegates from 175 of the UK’s leading suppliers were asked a simple question - ‘As individuals, how many of you have been working in e-commerce for more than two years?’
Of those assembled in London that day, only a handful of us were able to raise a hand to indicate that we had indeed been helping to shape a dedicated approach to maximising the opportunity of online shopping for more than 24 months - despite the fact that the channel already accounts for £6.5 billion of the UK’s £169.7 billion grocery sales (IGD, 2013).
By the time a gentleman from Google had taken the platform to confidently predict that 25% of all grocery purchases would be via online by 2020 (and a staggering 50% by 2025), the point had been well made - ‘If you and your company are not already jumping all over this opportunity, then you need to start - NOW!’
The effect of such stark statistics on the assembled audience was interesting. Even those of us who were already converts to the possibilities of the online universe for selling and marketing the nation’s favourite food brands couldn’t help but take a moment to marvel at the enormity of the task and opportunity ahead for both suppliers and retailers.
“Delivery charges will almost inevitably have to be dropped”
For those whose hands had remained lowered in response to the initial earlier question about e-commerce experience, the effect appeared to be even more profound - some had certainly paled a little as they made a note to report back to colleagues with a ‘don’t panic, but we really need to start taking this seriously now’-style analysis of the day’s key findings.
Such an approach - even if better late than never - will probably serve them well, at least initially, for the good news is that there are many things that suppliers can do relatively quickly to ensure they are making the most of the current online opportunity. For example, talking to their major retail customers about the opportunities available, or realigning marketing budget to support the leading online shopping portals, are good starting points.
But if, as an industry, we are truly going to make the most of the unprecedented opportunities offered by online retailing, then we all need to take a good look at ourselves and ask, ‘Are we really doing the best we possibly can here?’
At Kerry Foods our position as a trusted supplier and expert in chilled foods means we have been privileged enough to help retailers shape their online offer. We’ve done that by sharing insight and knowledge about the chilled category and our brands, such as family favourites Cheestrings, Mattessons Fridge Raiders and Richmond sausages, as well as by supporting retailers through a mixture of great promotions and online advertising.
As a result, our dedicated online team is now in the third year of a five-year e-commerce project growth plan, and the results speak for themselves - last year online sales of our brands through the leading retailers grew at double the rate of the online grocery marketplace. And we’re expecting accelerated growth from our online retail partnerships this year.
But we believe it is only through industry collaboration and shared first class thinking that we can truly ensure that grocery continues to enjoy its place at the top table of online retail. Retailers and suppliers need to start breaking down barriers to make the online opportunity even more comprehensive and spectacular for shoppers.
For a start, delivery charges (including click & collect) will almost inevitably have to be dropped universally at some point, albeit with the minimum spend caveats that are currently operated by some retailers, while it shouldn’t be beyond the imagination of leading retailers and suppliers to start giving online grocery shopping a real point of difference, for example by offering online-only SKUs, special offers and packs, especially as dark stores and dedicated online distribution centres become the norm.
And, as with the more traditional bricks and mortar style of retailing - which, by the way, will also need to evolve to make a physical shopping expedition more of an experience than a chore - retailers will continue to look to their leading suppliers to show them the way to the next big thing in chilled, frozen and ambient online grocery.
Likewise, it shouldn’t be beyond the imagination of retailers to start offering suppliers new and innovative ways to market their goods online as shoppers look for mealtime inspiration and reassurances about quality and value for money.
One thing is certain, UK retailing is in the midst of a seismic change and those retailers and suppliers that fail to fully embrace the technological advances in the market will fall behind.
Obviously, we know which camp we fall in. Now who’s going to join us?
Gordon Morrin is head of e-commerce at Kerry Foods
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