Considering it's summer and that's normally a slow season for many businesses, there has been a ton of news in the past few weeks regarding the grocery industry. Perhaps the most shocking prediction is a report from Nielsen last week stating that online grocery shopping will more than double by 2014.
LOS ANGELES (Reuters) - Online purchases of consumer packaged goods from disposable diapers to processed food will more than double to $25 billion by 2014, information and measurement company Nielsen said on Monday. (Nielsen sees Web grocery growth, plans new service, June 20, 2011)
In addition there was another article published in the June 27th issue of Supermarket News talking about how the newer generation of grocery shopper, namely Generation Y, may soon start to substitute the brick and mortar shopping experience for a virtual one. (A Race to Sell Younger Generations on Stores, Supermarket News, June 27, 2011)
Both of these articles appear to be stalwart warnings for grocery stores, and independent chains will probably be the hardest hit. However, I'm not sure if I totally buy the idea that these younger generations will completely forego a physical shopping experience for a digital one. I mean, how exactly do a squeeze a melon via the Internet?
However, I believe these articles should serve as a call to action for these grocers. In order to capture the younger generation and remain viable grocery stores will need to innovate. Things like iPhone apps—similar to Droste's Deli & Bakery Ordering app, iOrder—as well as a more active in-store experience, may help to keep this audience engaged. As with all retail outlets that are seeing a shift in business from in-store to online, the key is to provide a unique shopping experience different from the virtual one. This doesn't simply mean having friendly store associates though.
The younger generation isn't quite as enamored with asking employees for help when shopping. They are looking for tools that can aid them in their buying and allow them to get in and out quickly. This is where things like iOrder, apps that provide aisle numbers for items and digital coupons come into play. Do you have any of those? It might be time to invest in at least one.
Online grocery shopping will grow as Nielsen has predicted. But I'm not 100 percent sure that it will render grocery stores obsolete. And if this news is what inspires the grocery industry to innovate, then I'm all for it.
Take care until my next post. Tom