Our Investigation into online shopping started a few weeks after I started working at AWG. I was having lunch with friend and telling him about my new job. In the midst of it, he asked “When am I going to be able to get all of my groceries online?” As AWG retailers mostly hadn’t stepped into the online shopping space, that wasn’t exactly a question I was hoping for.
Then, we got a request from larger retailer for an online shopping platform. He wanted to know what we thought was the best one, which one made the most sense, which one would take him into the future?
That launched us into an investigation of what was happening in the industry.
As a normal tactic, I just started googling. At that point was still new to the grocery industry and didn’t know platforms. This lead me to article after article predicting the rise of online shopping in the grocery industry.
Historic online shopping platforms for grocery had been around a while, but not much had changed. Challenges with user interfaces were apparent as they weren’t the same as other online shopping platforms customers were getting used to whether. Amazon and Zappos had trained consumers to shop online differently.
And, for us, we still didn’t have all of our retailers on any form of digital platform. We were still proving the value of websites, email programs and social media to retailers only viewing these platforms as a cost. Their inherent benefit in driving sales each day was harder to prove. The old mantra of location, location, location still dominated. Customers shopped at stores because they were on the way home from work, or down the street, or they had known the family for years. Yet as more and more competition came about, even that started to change.
Our fundamental business is built around independents though, and while we had seen the models for new online shopping platforms that were built around portals and companies aggregating services for multiple retailers, we weren’t sure that was the path for us. The pride of being an independent is having the name on the front of the store mean something. There were touchpoints we had to consider. The small town, family feel had to still be there. We knew the perception with online shopping was the loss of touch with the product. For the consumer, someone else was doing something we’d made personal for so long: shopping for the family’s food. Talking to the butcher, chatting about the high school football game with the cashier, picking the perfect tomato was all in someone else’s hands now.
Yet while retailers wanted to hold on to those customer experiences, a new generation of shoppers was demanding faster, more convenient and more personalized shopping and they were teaching others to expect that as well
Requests continued to mount as retailers saw competition exploring the online shopping opportunity and we really dove into investigation. We’ve vetted over 12 providers in the online shopping space in the past 3 years. We’ve visited stores, we’ve had extensive discussions and biggest of all, we’ve really dug into how those platforms fit into the everyday experience of not only the retailer, but also the customer.
We finally narrowed on 3 platforms we were going to recommend to retailers. Then another provider was brought to us and we changed our mind. Then we changed again. The offerings were evolving quickly now, with the opportunity apparent and feature sets changing often. The industry was catching up, but retailers were still hesitant.
So we refined the offering. Instead of telling retailers about 3 providers, we broke the industry out into three different types of online shopping platforms. While at the base, the platforms were similar, they all had features that made them unique.
We started talking about the different pain points retailers had. Some were really worried about the user experience on the website and how it integrated into the brand’s reputation. Some were worried about the data flowing from the online providers. They were looking into the future of understanding how online shopping was helping them learn more about their customers. Some were only worried about how it was going to impact their store operations. What kind of resources were necessary?
In one bucket, we had a new experience for the consumer. The website was new, the platform was new, the heightened technology brought about a new user experience. The focus was on the consumer approach to the new platform. This new platform transformed the digital experience of the consumer. And it kept the retailer’s brand at the forefront.
In another bucket we were more concerned about data. What were we learning from consumers? How did we understand their habits better, relate their purchase information to data we could use for other consumers? This bucket of providers gave all consumers the same experience they were seeing elsewhere, and carried with it a different brand integration. This secondary brand often brought with it credibility and exposure.
In the third bucket we were hyper focused on the backend: making the platform integrate without causing more labor costs or disrupting the way the store was already run. The website platform didn’t matter because the online shopping was an extension, not a replacement. Once again, the retailer’s brand stayed at the forefront.
Then we started educating. What we learned early on was that we had to make online shopping relatable to retailers. In reality, it was.
While some retailers only heard about extreme costs associated with online shopping, we started calling it just an additional department to the store. It wasn’t a whole new way of doing business. Even aggressive numbers show online shopping only reaching 10% of total sales by 2020. We had to help retailers understand that online wasn’t going to take the place of their in-store business, it was only going to augment it. It was going to help new customers approach the store who hadn’t tried it before.
We asked retailers how many phone orders they did a week. What we found was surprising. Many of them answered quite a few. This was our in. If a retailer was taking phone orders, picking the items and then delivering it to a local nursing home, or fire station or even just having Mrs. Peter’s order ready when she swung by after work, this was essentially online shopping, just in a different format. At this point, the addition of online shopping wouldn’t add cost necessarily because those resource costs already took time, the platform would hopefully increase efficiency.
Having an online shopping platform isn’t something that can be done in a tunnel, though. Nor is it something that you just launch and people will come. The experience has to make sense, it has to integrate and it has to make the customer’s life easier, not harder.
When we looked at integration, we knew first off, online shopping obviously couldn’t be done without a website. And it couldn’t be a website on a historic platform. These websites have to respond to mobile devices. People shopping online don’t necessarily sit down with a print ad and make a list then checkout. They shop on-the-go. The add items as they think of them or as they run out of them. They take days to build lists.
To relate this to retailers, I use the example of the list on the fridge. We’ve all been there, you have a running list of things you need, yet in this application, those items go directly into your grocery cart online. Then, instead of taking a paper copy of the list to the store and shopping, a consumer just hits checkout. We were once again considering how we relate what was familiar to the way things had changed.
Customers want the ad to be digital too. One of our interesting lightbulb moments was when we were trying to determine the best way to shop from the ad online. Jason, who works on my team, said out loud one day, isn’t it weird that we are trying to take a print ad and just convert it to a digital form? He was right. We weren’t thinking differently about the ad. Yet how many of you have shopped on amazon.com from what looks like a .pdf? Likely none of you. That experience is different. You search for items, the ones on sale still appear in various areas of the site, but it isn’t all one one piece of art. The experience is different. This was only one of the things we started to look at differently. We were breaking out of the box of “the way we’ve always done it” to investigate the new way it needed to be done.
Back to those sale items. One question that often came up from retailers was the consideration of pricing for online shopping. Was the price online the same as in-store? What fees applied to cover the costs? Did a consumer expect to pay the same price for someone purchased online as she did in the store? Some platforms modified that price based on optimal online price point. This could optimize margins and sales for the retailers, but it could also potentially confuse consumers. And no pricing gets online without item and price files. We had to determine how to best get those in the correct format and at the correct time. Incorrect data on the website wasn’t going to do anyone any good.
Websites were the most apparent functional need, but they weren’t the only one. To build websites, we needed photos. And not just the front of the package like in the ad. To make this experience like shopping in a store, a consumer had to be able to see everything. The nutrition panel, the ingredient list, the serving sizes. The experience had to be just like standing in an aisle and looking at the products.
Retailers had to understand how to also educate customers about the new platforms. This needed to be done through social media and email sends and signage in store. People shopping the store already needed to know about the service, but so did people who hadn’t tried the store recently because they were looking for a different offering.
What’s one of the best ways to reach out to digital consumers? Still email. While we all get lots of it, especially from what we know from experience in grocery, it still works. But in the online shopping world, email changes. Weekly marketing emails aren’t all that matters. Transactional emails, thank you for shopping emails with receipts, emails with sale items based on your past history. Search histories can tell what customers are looking for that you don’t carry. Advanced data can help target certain customers with goods others in their demographics are purchasing. All this data changes the way emails can be done. But the email platform not only has to accommodate these robust data offerings, it also has to be manageable for the people running email. A retailer with online shopping now has the most in-depth form of loyalty possible, yet only for a certain segment of customers.
So then loyalty programs change as well. There are online shoppers to consider and in-store shoppers to consider. Are they the same? Do they purchase the same things? How does having a card translate to the online shopping experience? Do I get my points? Can I redeem them? And what about coupons?
Oh, coupons: just another component of the past world that are rapidly changing. Manufactures still print and distribute FSIs. We have to consider how those get applied to online orders.
And these are just the marketing questions.We haven’t even scratched the surface of delivering data and item files, or having real-time inventory, or payment processors.
The questions are a plenty with online shopping. But, we’re working through all those details to embrace the opportunity head on. We have to. It is the way we stay relevant to our consumers and the way we lead our retailers into the future of grocery.