It is no secret that the current coronavirus pandemic sweeping the globe has rearranged the way that the consumer meets their basic needs, especially in regards to purchasing groceries. According to an interview conducted by Forbes with the VP of Global E-Commerce at Heinz, there are 3 models of digital grocery that are not only established and functional but rapidly growing. Grocery e-commerce is here to stay, here’s what you need to know about the digital grocery models and how they can benefit your business.
Digital Grocery Model #1: Pure Play/Ship-to-Home
This particular structure consists of a direct to consumer ordering system without an intermediary facilitating any point of the fulfillment or delivery. Grocery e-commerce businesses such as Peapod or Amazon Marketplaces and some Walmart Marketplaces all share in this space. In pure play or ship to home, a consumer can complete their grocery orders online and have their orders fulfilled by the warehouses owned by these businesses and then delivered by their personal fleet as well.
Digital Grocery Model #2: “Last Mile”
In this grocery e-commerce model, consumers have the ability to order from a list of stores within their local area. Orders can be made at one or multiple stores depending on what the customer prefers. The order is received and fulfilled by a “shopper” who personally shops the grocery store aisles on behalf of the customer and then delivers the order to the customer’s desired address. This model is seen with companies such as Instacart or Shipt that create a personalized concierge-type experience for the customer. Amazon Marketplace has also jumped on this bandwagon in their collaboration with Whole Foods in an exclusive partnership deal. Consumers wanting to shop online at their local Whole Foods stores must place their orders through Amazon Fresh to complete and receive a delivery from Whole Foods.
Digital Grocery Model # 3: “Click & Collect” or BOPIS (Buy Online Pickup In Store)
A rather popular grocery e-commerce option has begun to emerge that many local grocery stores have begun to utilize in addition to their participation with apps like Instacart. Many grocery stores have established an online shopping cart for their store where local customers can order their groceries ahead and pick up at their convenience. In this model, the grocery store staff receives the order and then has associates who shop and pack the groceries so that the customer can quickly pick up. Many participating in this model offer a “drive-up” service that allows customers to simply pull up curbside to their local grocery store where their order is then brought out and packed into their vehicle as a convenient benefit for using the service.
Although notoriously difficult to convert to an online environment, due to the pandemic, consumer demand and overall need to pivot, CPG’s have no choice but to convert to new avenues. Now accounting for 25% of all grocery sales (up from 17% just last year) this market will continue to grow and evolve to suit the new climate created during the pandemic.
Whether you are a manufacturer, grocer, or CPG company, it is important to stay in the know about the emerging pathways of grocery e-commerce. For more news like this and other trending articles visit our blog, the FDA Resource Center.