How can you win in grocery e-commerce?
At IGD, we’ve recently published the results of our annual Online Capability Survey, bringing together the views of over 40 e-commerce managers at leading international grocery suppliers. This provided us with insight into how the channel is evolving in both mature and less-developed markets. Overall, the news is good, with more companies at the top-end of the transition curve than last year, and fewer at the bottom.
But many still have a lot of work to do in order to maximise the potential of this key growth channel. Here in Canada, most suppliers are only just getting started.
Providing dedicated online resource
One way in which suppliers are responding to online growth is by allocating dedicated online resource. Whereas previously this resource might have been part of a national account manager’s or other employee’s responsibilities, now 24% of suppliers say they have dedicated full-time headcount for the online channel, allowing them the time and expertise to fully focus on online initiatives and growth.
Adopting a differentiated trading strategy
Rather than adopting a “one-size-fits-all” strategy to online, suppliers are beginning to introduce differentiated strategies with each major customer. Of those surveyed, 10% said that this was an established practice and 24% said they were part way there, with these individual strategies for online forming part of the annual joint business planning process with each retailer. Working in this way allows suppliers to exploit various opportunities offered by different retailers, such as category strengths, online offers and events, and allows them to better target their online presence to different shopper demographics.
The basics are in place, but how about mobile?
The majority of companies are mastering the basics online. Top capabilities from survey participants related to having images in place, and an online strategy that forms part of joint business planning with retailers. Many were also working at understanding category dynamics and the online shopper journey. Yet while the basics now appear to be largely in place, there are gaps to fill, particularly in mobile.
Different stages of the journey
It is natural for suppliers to be at different stages in the online journey. This often equates to the company’s size and resources. However, leading international manufacturers are recognising the gaps in the market and working to maximise the opportunities. Those with the highest online capability are prioritising future investment in mobile and new technology together with supply chain innovation. This puts them ahead of less developed peers, who are still working through understanding the online shopper, developing online category management and aligning their internal structures to cater to the online channel.
Retailers prioritising to work with the leaders
In IGD’s conversations with retailers, we are hearing that the key focus for suppliers is to get the basics right, but that once this is in place retailers are looking to partner with leading suppliers to drive innovation and growth in the channel. A collaborative approach can lead to a more personalised shopping experience for those with time to browse.
Early days but interest is increasing in Canada
Here in Canada it remains very early days. But over the last six months we’ve seen major new grocery ecommerce initiatives from three of the top five retailers, including home delivery, click and collect and collection lockers. Many suppliers are starting to put more focus on the channel and develop their trading strategies. Test and try will be an important mantra to getting it right in this channel, and while the numbers are small right now, investing in this channel is important as I see it growing rapidly in the years ahead.
Stewart Samuel is Program Director at IGD. Find out more about how they are helping Canadian suppliers optimise the opportunities in this channel with its new workshop program. Visit www.igd.com/onlinecanada for more information.