Impact of Ecommerce on Grocery Retail Strategies

Your digital grocery sales didn’t perform in 2023? Digital grocery sales saw a dip in 2023, accounting for just 13.1% of the total market, with a drop of over a percentage point from the previous year. The sector faced challenges such as a $19 billion loss due to unavailable items and a $281 million sales margin setback, influenced by a 12% inflation-driven price hike. So how do we prepare ourselves better to tackle this situation in 2024? Here’s what I think: - Leveraging AI: With budgets set to increase by 14-37%, investing in AI is pivotal. AI integration can streamline operations, from inventory management to enhancing customer experience, providing a competitive edge. - Tech Investment: Partnering with the right technology provider enables you to thrive by leveraging suitable tools and techniques tailored to your specific needs. Not all requirements are inherently expensive, and strategic investments can lead to better benefits for your business. - Omnichannel Strategies: The dominance of the pickup method in omnichannel shopping (51.4%) suggests its effectiveness. Grocers should focus on enhancing this approach to cater to evolving customer preferences. - Online and Offline  Experience: Over 80% of executives prioritize improving integration between physical and digital operations in 2024. This synergy is key for a seamless shopping experience and addressing revenue growth challenges. While 2023 posed challenges, the positive outlook for 2024 is evident. Grocers' confidence in technology investments signals a long-term upward trend in digital grocery. So, how have you prepared your business to boost digital sales of groceries in 2024? P.S. Adding the link to the article that intrigued this thought in the comments below! . . . #digitalsales #grocerystores #aiadvancements

If you're a sales leader in a food and beverage company, growth and profitability are always challenging, even with the ongoing boom of online sales in the grocery category. 📍With the ongoing CAGR of 19.2% between 2022-2025, global eCommerce food and beverage total sales is expected to reach $857B next year. Traditional sales growth levers such as increasing the sales headcount, increasing marketing spend, or adding more training programs to the existing salesforce will not cut it. Instead, it will only increase the cost of sales in the current environment of price wars between the omnichannel commerce giants. Concentrating on the identification and thoughtful segmentation of new customers can eliminate the need for additional sales personnel or costly training programs for expansion. Even better, advanced pricing technology solutions allow sales leaders to maintain a growth-oriented sales team by providing clear insights into pricing strategies and discount practices. Technological solutions play a pivotal role in maximizing the utility of #data and maintaining awareness of financial metrics, enabling businesses to focus on areas that require more attention. ++ What I see in Food & Beverage Space Today ++ 📍Not every omnichannel retailer is the same; deep customer understanding, not just in company size or industry segment but also the department level, purchase behavior, and market positioning granularity, enables more precise targeting and personalized pricing strategies for F&B brands. 📍Utilization of robust pricing solutions that integrate internal and external data is highlighted to automate decision-making processes. These technologies will reveal insights into #sales and discounting practices, leading to more efficient #revenuemanagement. 📍The discussion has been pivoting away from traditional methods of revenue growth, such as increasing headcount or training. Instead, it's concentrating on pricing solutions that make the existing sales force more effective without additional costs. ++ 🔭 What's On the Horizon 🍻 ++ 💡Focus on 4 essential KPIs with the power of data and pricing technology solutions: win rate, revenue vs. discounts, sales size, and customer lifetime value. This will provide a clearer picture of where to focus sales efforts and how to adjust pricing strategies with each client. 💡Food and beverage brands should invest in advanced pricing software that optimizes pricing based on real-time market conditions and customer data, optimizing profitability. 💡Building predictive analytics capabilities will enable brands to forecast future purchasing behaviors and price sensitivities. This forward-looking approach should anticipate market trends and customer needs, allowing for proactive rather than reactive pricing decisions. Follow #ecommert for daily #ecommerce #digitalshelf, #retailmedia and #brand insights. #pricingoptimization #pricinganalysis #cpg #foodandbeverage

Most people don't realize that grocery is already the largest ecommerce category by volumes. Your typical apparel / electronics order consists of 1-2 items with an average unit price of $20-30. Your typical grocery basket consists of 30-50 items with an average unit price of $5-10. To achieve the same $ sales, you need to ship a lot more groceries than apparel or electronics. For #supplychain and #logistics operators, volumes matter more than sales. Each % increase in grocery ecomm penetration has a disproportionately large impact on volumes shipped. For grocers, the challenge is not just about managing larger volumes, but about using technology to drive profitability and customer loyalty. Leading e-grocer knuspr.de (led by Tomáš Čupr and part of Rohlik Group) recently achieved positive contribution margin while growing 110% YoY in the hyper-competitive and labor-expensive German market. How did they do it? By executing superbly and using Brightpick robots to boost fulfillment capacity and reduce cost. Blake Droesch Brittain Ladd Matthias

Online Grocery: You Have a Decision to Make Given that regional and independent retailers are losing the online sales battle, it begs the question: Is there a connection between poor online sales and the platforms that they use? It’s rare that a retailer who is a poor operator stays in business long. So if that’s the case, poor operations is most likely not a major contributing cause to independent and regional retailers’ declining online sales. Maybe it’s time to look at the eCommerce platforms retailers are using. Is a poor user experience harming online sales? Is the solution provider charging excessively and taking too much time for systems integrations needed by the retailer? Are the solution providers truly invested in the success of their retail customer? Are they willing to co-invest in that success or are they simply looking for the next payment? An article from Digital Commerce 360 earlier this year calls out that grocery eCommerce sales are on a downward trend. Online grocery sales had dropped to $97.0 billion in 2022 from $97.6 billion in 2021.” And dropped further to $95.8 billion in 2023. But here’s the kicker: While the overall grocery eCommerce market is down, the largest retailers like Walmart, Costco, and Kroger, are dramatically growing their online sales. Which means that many of the independent and regional chain grocers have a problem. And the problem is worse than many realize. Lost sales, lost retail media revenue, lost first-party data are just the beginning. The largest retailers are focused on getting eComm right to power digital transformation across their companies, positioning them for future success. So small, mid-size, and regional retailers have a choice to make: Continue as they are and accept middling performance, surrender online grocery to third-party marketplaces like Instacart, Shipt, and Door Dash, or commit to getting online right and competing with the largest players. Center for Advancing Retail & Technology (CART) #ecommerce #grocery #onlinegrocery #groceryonline #groceryecommerce #digital #digitaltransformation #online #onlinestrategy #CEO #CIO #CMO #COO #supermarkets #supermarketecommerce #foodretail https://lnkd.in/g82hEk6d