As grocery shifts to digital, solutions strategies of retailers and manufacturers need to adapt
Yuni Sameshima is the co-founder and CEO of Chicory, an NYC-based technology company that makes recipes shoppable and uses artificial intelligence to create digital grocery shopping experiences. Under Yuni’s leadership, Chicory has grown to reach over 70 million unique viewers per month, and their clients and partners include Time Inc., Peapod and many more. Yuni has spoken globally about grocery trends and ecommerce. Prior to founding Chicory, he worked in the food and venture space at Chobani and ff Venture Capital. He graduated from Colgate University with a Bachelor of Arts in Molecular Biology and speaks fluent Japanese.
It goes without saying that 2017 has been the year of online grocery. With manufacturers and retailers more interested in digital than ever before, there has been a prominent push to get into the industry. But as consumers shift from traditional brick-and-mortar shopping to the world of e-commerce, changes in shopping behavior pose a big challenge for retailer and brands.
Shawn O’Grady, senior vice president and group president of Convenience Stores & Foodservice and Global Revenue Management at General Mills, recently addressed one of the major differences between traditional e-commerce behavior and grocery during General Mills’ annual investor day. He introduced the notion that online grocery shoppers can be placed into two categories: the “spearfishers,” who buy one or two items at a time, versus the “full basket” consumers who are looking for a one-stop shopping solution that will help them buy what they need with just a few clicks.
Spearfishing is the traditional means of buying things online. Clothes, books and other goods are typically bought this way. You find a brand you like, you order a pair of sneakers or a new electric toothbrush online and then you get your selected products delivered. Grocery is different because grocery tends to be high volume. Consumers typically don’t buy one grocery item at a time. Instead, they buy 10, 20, 50, or 100-plus items. In the online grocery world, with perks like free delivery, basket sizes continue to grow even larger.
Why is this the case? Because grocery shopping isn’t spearfishing. Grocery shopping is “solutions” shopping. Ask anyone who is grocery shopping what they are buying and it’s not “hot dogs, buns, lighter fluid and charcoal,” it’s items “to cook a summer barbecue” or it’s “Monday and Wednesday night dinner.” It’s not about what the individual items that comprise the basket are — it’s about what those individual items create.
But the online grocery experience still presents major problems for brands and retailers — issues that set online grocery apart from traditional brick-and-mortar wisdom. These challenges are primarily due to a lack of impulse buys and loss of prioritized shelf space. Consumers often have a meal plan set before they go to the retailer’s site and, without that user tossing a bag of chips into their cart because it’s advertised at the end of the aisle, opportunities to drive spur of the moment purchases disappear.The question now becomes how to convince consumers to pick up additional items when they’re browsing online. But by leveraging solutions-based behavior, retailers and manufacturers can alleviate many of the problems that typical brick-and-mortar stores face as well.
The first is the center aisle issue. Everyone knows that a grocery store is laid out with the most perishable, highest-volume goods placed on the perimeter of the store, and the challenge is to get consumers to buy the products in the middle. By offering solutions online based on users’ shopping habits, consumers can be shown options that include combinations of products that span the entire store. This also alleviates the physical storage issue of not being able to combine frozen foods with pantry goods, for example. Solutions can be the key to getting consumers to try new products. Recipes, for example, are an incredible source of inspiration and are frequently used as a blueprint to create shopping lists.
For manufacturers, the key is figuring out how to build trust with the consumer and getting on their shopping list. One way is to be the one that provides the list. Building a strong content strategy that makes it more convenient for consumers to shop for their solutions is a task that retailers will likely look to manufacturers to solve. CPG companies already invest heavily in content strategy. General Mills, for example, has Pillsbury.com, TBSP.com and BettyCrocker.com which has recipe content to rival traditional recipe publishers. This is only expected to increase as dedicated content strategy allows those companies to influence the consumer with a “grocery experience”, without needing the retailer as a middle-man.
In reality, there will never be a 100% shift to e-commerce, and we should expect an omnichannel experience — or strategies that span from in-store to digital. Going forward, online influence will be paramount in driving retailer and manufacturer strategies, and these industries should prepare proactively for a solutions-based world.