Testing Testing 1, 2, 3: The Link Between Experimentation and eGrocery
The global e-Grocery business is projected to reach $150 billion by 2025 , and much of that business is enabled by new technologies. But without in-house experts and researchers, some grocers wonder how they can provide competitive services to their customers. Many find that partnering with third parties (often start-ups) is an effective way to implement industry-leading technology that drives growth.
How do those third party businesses provide grocers with the most profitable services? Here are the biggest ways:
Experimentation & Testing
In recent years, businesses ranging from your corner market all the way up to industry giants have poured money and time into testing new methods of fulfillment, sales, and customer engagement. To name just a few:
Krogers and Walgreens are testing a pilot partnership, wherein customers can pick-up online grocery orders from Kroger at their nearby Walgreens
Fry's Food (owned by Kroger) began testing driver-less vehicles this year, delivering groceries via public streets in Scottsdale, Arizona
Amazon now has Amazon Go stores in Seattle, Chicago, and San Francisco, where customers leave the store without paying, and receive an automatic bill for the items they took.
All over the country, grocers are testing what customers want, how to increase efficiency and decrease waste, and how feasible it is to implement sophisticated new technology such as robotics. But since individual grocers often don’t have the time and resource to devote to experimentation, it’s crucial that they partner with experts in the fields of distribution, search optimization, content management, and fulfillment, in order to test, learn, and implement changes quickly.
As the demand for grocers to go omnichannel increases, so does the demand for a third-party business to lead and support transition. Grocers can't do it alone, so they rely on outsourcing much of the labor and product development.
Recently, Kroger announced its partnership with Ocado to open an automated warehouse facility in Monroe, Ohio. This customer fulfillment center (CFC) will benefit Kroger and its shoppers, but is powered by by the U.K.-based Ocado, who will “deploy and maintain modules of mechanical handling equipment to provide a certain level of throughput” (Supermarket News).
A more common partner for many grocers is Instacart, a third party service who has helped stores (and shoppers) take the first step toward e-commerce by offering home delivery from brick-and-mortar stores such as Wegmans, Sam’s Club, Publix, and ALDI. As of November 2018, Instacart partners with 15,000 stores in more than 4,000 North American cities, and is available to 72% of U.S. households (Forbes).
In order to go fully omnichannel, though, retailers need partners with intelligent, end-to-end solutions to this challenge, such as Fulfillment Management System, and Endless Aisles. These types of solutions help grocers implement built-in personalization and search capabilities, data intelligence, and other top-of-the-line products and services. As the industry continues to evolve, grocers should look to partners who continuously develop products that serve their business, enhance their customer experience, and ultimately increase their bottom line.
Getting to Minimum Viable Product Quickly
Within the realm of product development lies the core concept of successful start-ups: creating a solid MVP.
According to Eric Ries, who coined the term in his industry-changing 2011 book The Lean Start-Up, a Minimum Viable Product is a product as its most basic version, "which allows a team to collect the maximum amount of validated learning about customers with the least effort." A start-up releases its MVP to gauge consumer interest and needs, and then, modify it to meet those needs. The idea is to create a product that is precisely tailored to its target audience - with their feedback already implemented. A smart, strategically developed MVP can help start-ups prevent large capital losses and quickly offer a revenue-driving product.
A successful MVP requires enormous amounts of effort and shrewdness. It requires paying close attention to what attracts customers, changes in trends and technology, and where there are gaps in the market. Without the internal resources or bandwidth, this can best be accomplished by a team of professionals with years of accumulated knowledge of the industry, paired with a board of discerning advisors .
The value of getting to an MVP quickly is obvious: if a brand does not work fast to get their product in front of consumers, it will surely be left in the dust behind businesses who will. Early adopters have the advantage of claiming space in the marketplace, and can continue iterating and evolving their product from that foundational presence.
Engaging Customers for Feedback
In 2015, Price Chopper engaged Food for Thought, its insight community of 5,000 shoppers, to get customer feedback on its branding. Based on the response, the company decided on a certain design. Since launching the new design, the store had a 5% increase in customer traffic. They also used Food for Thought to help them rename and repackage their private label products, which resulted in a 7% sales increase of those products after the new launch.
With today's abundance of channels for monitoring customer satisfaction – especially because customers are more willing than ever to share personal information – there is no shortage of data about what customers want and don’t want. That data is gold for eGrocery, because it helps to predict trends and tailor services to the needs of the customer.
According to The 2018 Grocery eCommerce Forecast from UNATA, 76% of online shoppers said they would switch grocers to one that offers a better digital shopping experience. BusinessWire reports that by 2020:
62% of consumers will want to access information about in-store products without speaking to a salesperson
55% will want to view home furnishings inside a home before they make a purchase
54% will want a shopping list provided by a store app, with a map to locate products in-store
Knowing these trends is one thing, and implementing strategies to capitalize on them is another. Most grocers don’t have access to methods that can leverage data to create a personalized customer experience, such as machine learning - so they might not be able to respond to customer trends effectively. By utilizing services like eGroceryIQ, grocers can take advantage of machine learning and other intelligent methods to cater to the latest trends and provide the best possible customer experience.
Brick Meets Click, a strategic advisory firm based in Illinois, projects that in 2019, "companies that provide online grocery delivery and pickup on demand stand to grow sales 25% to 30%" (Supermarket News). Yet many grocers don't have the time or resources to implement the new technologies that would make that possible. Outsourcing services such as those to third parties is an effective way to stay competitive in a fast paced industry.
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