According to a recent report, analysts believe that the online grocery market will grow from 4% of total sales to 20% by 2025, which is not too far away. The study points out that while most people will be concerned that the rise of online grocery could kill brick and mortar stores, they also believe that grocery stores will actually adjust their strategies to appeal to the digital shopper.

Before they can arrive at this shopping destination utopia of the future, grocery stores need to make an increased investment in a multi-channel experience and have a greater focus on incentivized digital loyalty programs. If they successfully do that, grocery stores will be able to co-exist in an environment that is quickly changing.

Tom Caporaso, the CEO of Clarus Commerce, an e-commerce solutions provider believes that Amazon’s decision to test several Go store concepts highlights the potential opportunities in the grocery industry in the coming years.

Caporaso advised, after moderate grocery sales growth in recent years, Amazon sees a chance to implement new bricks-and-mortar models that cater to consumers’ changing behaviors. Meanwhile, a new report says that online spending on groceries could increase five-fold by 2025, from its current 4.3% share of the market to 20%.

Established supermarkets clearly have to step up their efforts to retain and grow their audiences. That includes enhancing their online capabilities; expanding their ordering, pick-up, and delivery services to better suit their customers; and creating a seamless, convenient shopping experience across multiple channels — computers, mobile devices, and the stores themselves.

It also includes strengthening their loyalty programs. Shoppers are already more likely to join grocers’ programs than those of other businesses, and more liable to shop and spend more at stores that reward them for doing so. Caporaso also believes the key is to engage them with compelling offers that meet their evolving interests and desires.

Interestingly, cash back and rebates rank just behind product discounts as the most attractive benefits among shoppers of all ages, including Millennials, who now make up the largest demographic.

Amazon and countless other companies now see a variety of growth opportunities in the grocery industry. Supermarkets, therefore, need to keep exploring new offers and approaches; analyze their customer data incessantly; and use the lessons learned to develop a broad range of services, benefits, and messages that appeal to an increasingly digital consumer audience.

There is no longer a one size fits all approach with shoppers seamlessly switching between the art of showrooming and webrooming depending on what type of item they are purchasing. Maybe, we shouldn’t be too surprised to see that Amazon is aggressively pushing forward into the grocery market and while physical store Walmart increases their online presence.

In commerce, the blurred lines that have existed between our online and offline worlds are rapidly disappearing. But this can only be a positive thing as companies begin to understand exactly what the digital transformation means for businesses.

It seems that the future success of retailers in our imminent future is not about being online or offline but both. Caporaso recently revealed further insight into this fascinating topic on my podcast where he also talks about the strategy that both Amazon and Wal-Mart are already following.

Retail
 
Startups
 
Technology
 Neil Hughes Neil Hughes
Owner • Tech Blog Writer