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To Battle With Big Box Grocers, Independents Must Up Their Game

Independent grocers can compete with household names like Amazon, Walmart, and Kroger, provided they have the right tools. Consumers want compelling offers and personalized experiences. Such expectations, fueled by the shift to online shopping during the pandemic, have forced retailers to reexamine their offerings. By implementing an automated system that provides personalized messages, seamless checkout, and data analytics, grocers can compete with larger brands.

This article outlines key steps to succeeding in the independent grocery space. Content includes:

  • How to make your online shopping experience an extension of your in-store experience
  • How endless aisle capabilities allow customers to shop local without overwhelming grocers with an inventory item explosion
  • How in-store order picking and fulfillment solutions can drive in-store and online sales

Content Summary

Make your online shopping experience an extension of your in-store experience.
Optimize the mobile shopping experience for customers.
Provide a deep and varied product assortment using an endless aisle solution to effectively compete and drive incremental sales.
Drive personalized product recommendations.
Optimize omnichannel sales potential with digital marketing.
Use technology to streamline in-store picking and fulfillment.
The future of ecommerce.

Independent grocers can compete effectively in today’s booming ecommerce market, if they have the right tools to provide a compelling offer to their customers.

Retailers need an ecommerce solution that enables them to turn their online ordering platform and mobile shopping app into extensions of their store brand, with functionality geared to create user-friendly experiences. In addition, as consumers have become accustomed to being able to order anything they want, whenever they want it, retailers should provide access online to a wide assortment of products through an endless aisle solution — an economical way to offer customers more product choice. Retailers should also have the ability to leverage shopper data to create a better, more personalized shopping experience and at the same time drive incremental sales.

Online grocery sales grew 54% in 2020 amid the pandemic-driven ecommerce boom, according to research from eMarketer, and many consumers appear to have retained the habit.

“The pandemic pushed consumers to search for a safe and convenient way of getting essential grocery items, and many retailers adapted to that demand,” said Whitney Birdsall, eMarketer senior forecasting analyst at Insider Intelligence. “With the growing number of stores offering curbside pickup and an increase in features offered by grocery delivery apps, consumers are now presented with a variety of incentives and options to order their groceries online.”

eMarketer projected double-digit sales gains again for grocery ecommerce in 2021, and forecasted that by 2023, online grocery sales will make up 11.2% of total US grocery sales.

As companies such as Amazon, Walmart, Kroger and others have moved aggressively to capture that market share, independent grocery retailers need to act quickly to capitalize on their own opportunities to attract and retain those customers that are buying groceries online. They can do so with the right combination of strong local connection and world-class, affordable technology.

Following are six keys for independent grocers to elevate their ecommerce capabilities to the next level:

Make your online shopping experience an extension of your in-store experience.

This is perhaps the most important step that independent retailers can take as they seek to improve their online shopping capabilities. “Retailers take a big risk when they trust third-party ecommerce shopping services with their brand and their customers,” said Josh Ray, chief commercial officer and cofounder at ShopHero, which provides a range of ecommerce and other solutions for grocery retailers and wholesalers.

A retailer’s online presence should also reflect the attributes that differentiate it from other retailers and define its personality and brand. This includes not only color schemes and logos, but also other distinct characteristics that the retailer offers in its stores, such as high levels of customer service or expertise in specific product categories.

“We think online should be an extension of their in-store,” Ray said. “Retailers have built a reputation over years or even generations in their communities, and if they are known for certain things, that should be reflected online. We can take all of what makes them special and amplify that online.”

Why would you not want to own that experience from start to finish to ensure that it meets your standards? It’s one more touchpoint with your shopper — one more way to impress them and strengthen that relationship. – Josh Ray, Chief Commercial Officer and Cofounder, ShopHero

Optimize the mobile shopping experience for customers.

Prioritize your mobile presence. The majority of all ecommerce purchases are now completed on mobile devices, including 70% of ecommerce transactions conducted through ShopHero.

Retailers can optimize that mobile-shopping opportunity by offering a mobile app, rather than simply optimizing their website for mobile devices. While mobile-optimized websites, sometimes called “responsive,” have the ability to present information in a mobile-friendly format, they lack the functionality and personalization that a mobile app can deliver. A mobile app user will enjoy a much more personalized experience, which is especially important when it comes to ecommerce.

Just as a retailer’s website should reflect its in-store branding, so should its mobile app, said Ray. It should also operate intuitively and provide customers with a smooth checkout and payment experience, and offer retailers the ability to conduct personalized communications with their customers.

Some of the key features that an app should have in order to optimize the mobile shopping experience include:

  • A powerful search features.
  • Customization capabilities for each retailer/brand.
  • Optimization for all mobile devices/sizes.
  • Value-added features such as recipes, coupons, and order history.
  • The ability to scan barcodes with the phone’s camera to add items to an online shopping cart.

ShopHero’s mobile shopping apps have generated favorable responses from customers, said Ray.

The apps that ShopHero powers for retailers have an average of 4.8 out of 5 stars across Google and Apple app stores. That shows that the apps that we make for retailers are easy to use and loved by their shoppers. – Josh Ray, Chief Commercial Officer and Cofounder, ShopHero

Provide a deep and varied product assortment using an endless aisle solution to effectively compete and drive incremental sales.

Endless aisle capabilities allow consumers to access a broad assortment product available from wholesalers, and have those products shipped directly to their homes.

Shoppers gain access to thousands of new products that they don’t see in their local grocery store, or even in the larger chain stores, such as specialty and natural food items.

Retailers, meanwhile, can earn the same margin on endless aisle products as they would on products purchased in store, but without the costs of keeping products in-stock on their shelves, or even having them in their inventories.

Wholesalers gain access to all of the data around what’s being sold, which can help inform their own inventory decisions. Products that show strong sales online could end up gaining shelf space with some retailers, for example.

Endless aisle also allows customers to continue to “shop local” and support their favorite independent grocery store, which in turn contributes to the health of the wholesaler that supplies those retailers.

Although ShopHero only recently implemented its endless aisle capabilities, retailers have been enthusiastic about the concept, Ray said.

“They’re really excited about it,” he said. “They are currently limited in their store by its square footage, but when you go online, that limitation is removed completely.”

We really see endless aisle as a win-win for shoppers, wholesalers and retailers. Consumers can go to one place and find everything they need, as well as new things that they might want to try. – Josh Ray, Chief Commercial Officer and Cofounder, ShopHero

Drive personalized product recommendations.

The vast trove of data that retailers collect from the shoppers who visit their stores or shop online can be leveraged to tailor promotions in effective and engaging ways. Many larger chain retailers such as Kroger have become quite effective at personalizing promotions for their customers, and there’s no reason independent retailers can’t do the same thing using their data in partnership with the right solutions provider.

The ability to incorporate personalized product recommendations into endless aisle functionality makes shopping more convenient for customers and creates opportunities for impulse purchases that could not have occurred in-store.

“Nobody wants to scroll through nine pages to find the product that they want,” said Ray.

A key element of ShopHero’s endless aisle functionality involves tying into shopper data — looking at customers’ in-store and online shopping behaviors, and then analyzing it through complex algorithms to determine highly customized product recommendations.

These algorithms go beyond superficial pairings such as suggesting chocolate bars when a person has graham crackers and marshmallows in their cart, for example, and instead dig deeply into food ingredients and food science to discover appropriate recommendations.

The goal is to streamline the experience for the shopper, and make it as frictionless as possible for the retailer. We want to drive higher baskets. If we can show products that are compelling, and get them to add things to their cart that weren’t on their shopping list, then that’s a win for the retailer and hopefully for the shopper who’s getting to try something new and exciting. – Josh Ray, Chief Commercial Officer and Cofounder, ShopHero

Optimize omnichannel sales potential with digital marketing.

Retailers should seek to drive both in-store and online sales using personalized and timely emails, social media posts and text messages, which help extend the retailer’s brand online and connect customers’ digital and in-store experiences. Often, however, grocers lack the resources required to conduct digital marketing in a way that optimizes its potential to attract and engage customers and boost revenues.

The ideal solution is an automated digital marketing system that provides content, posting and analytics with minimal retailer effort. It should function like a retailer’s own internal digital marketing agency.

The digital marketing solution should have the capability to personalize communications and offers to shoppers using data collected by the system, along with inputs from other sources.

ShopHero’s Prism solution leverages a retailer’s branding and creates a single marketing message that is customized for each digital channel — email, Facebook, Instagram, text, etc. — and posts or sends it automatically, with no effort at all on the part of the retailer. Because it posts this content organically, it does not require additional spending on paid advertising.

In essence, Prism allows retailers to have a high-quality digital marketing strategy without the cost of hiring an outside marketing agency.

Use technology to streamline in-store picking and fulfillment.

In-store picking to fulfill online orders can be one of the most challenging aspects of grocery ecommerce.

An ecommerce solution should include features that facilitate in-store order picking and fulfillment, including:

  • Ease of use — Employees should be able to use the app with little or no training.
  • Store mapping — The app should direct pickers on the most efficient route through the store.
  • Pictures and descriptions — Pickers should be able to identify which products they should select by looking at images and product descriptions in the app.
  • Integrated phone contact — The app should provide pickers with the ability to easily call customers if they need to find product substitutions for their orders.

The future of ecommerce.

“The grocery industry is in the midst of a period of widespread change, innovation and disruption,” said Ray.

“We see that trend continuing and even speeding up as retailers leverage technology to meet their shoppers when, where and how they prefer to shop,” he said. “This industry has always been about the customer. Great retailers know that and their commitment to service shines through every aspect of their business.

“Technology isn’t changing that, but consumers have more choices than ever, and independents must keep up. That means an omnichannel approach to marketing that touches web, mobile, social, email, and SMS. It means a fully branded online grocery solution that works across every device and enhances the shopper’s relationship with your brand — not replaces it. It also means expanding your offering by providing more choices to your shoppers through an endless aisle solution.

“A huge opportunity exists for savvy retailers who embrace technology and use it as a tool to continue providing world-class service to each of their shoppers in this rapidly changing market,” said Ray.

Independent grocers can compete effectively against ecommerce giants by collaborating with their wholesalers to provide a strong online shopping experience. By extending their own brands online and offering an endless aisle of product assortment, retailers can capitalize on the opportunity to provide locally based shopping for their customers while giving them access to additional product selection.

In addition, ShopHero’s management portal facilitates oversight of the online shopping system. It enables retailers to quickly update banners, ads, specials, pickup time windows, and more.

It also provides analytics to measure and track the performance of your ecommerce and digital customer engagement operations, so that you can understand trends and react in real time. It offers analytics around web traffic and referral sources, product movement, and promotion redemption, as well as loyalty-program integration.

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