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January 15

Will Online Grocery Shopping be the End of Brick and Mortar Stores?

The future is here for consumer shopping and spending: widespread Internet access and use have paved the way for online shopping, and customers have responded. According to Nielsen research, in the United States, 8.1% of retail sales in the first three quarters of 2016 were online sales, and this number is projected to grow.3

However, despite early fears, this does not spell the end for the brick-and-mortar grocery retailer. In fact, it’s quite the opposite story: survey results collected by the International Council of Shopping Centers (ICSC) indicate that hybrid shopping experiences that merge online and in-store grocery-buying seem to have a much brighter future than purely online shopping and home delivery.

The “click-and-collect” model, whereby groceries are purchased online and picked up in-store, was used by 74% of online shoppers, whereas only 1% shopped online and had their groceries delivered, never having been to a grocery store. This is an even larger trend for Millennials who shop online, 81% of whom go to the store to pick up their orders.2

Nielsen research shows similar results. As stated in the report titled What’s In-Store for Online Grocery Shopping: Omnichannel Strategies to Reach Crossover Shoppers, “Retailers are implementing innovating digital technologies that are transforming the shopping experience, in order to become more relevant to consumers’ lifestyles and shopping occasions. Thinking in terms of bricks versus clicks is outdated; bricks-and-clicks is the current and future retail reality.”3

Bringing the digital and physical together can offer the best of both worlds to the customer, with the convenience of selecting products online without all of the legwork combined with the timeliness and proximity of the local brick-and-mortar store. In-store order fulfillment also offers customers a chance to inspect and potentially return merchandise while they’re at the store, a process made much more difficult when home delivery is involved.

Click and Collect advantages

The three most common reasons for choosing the model cited by consumers in the ICSC survey were lack of shipping feeds (73%), convenience (32.2%), and needing the items on the day of purchase (30.4%).1

With encouraging consumer willingness to use fulfillment options like in-store pickup (57%), drive-through pickup (60%), and curbside pickup (55%)3 compared to low adoption rates thus far in the U.S. (23%, per ICSC)1, click-and-collect is an essential factor to consider when planning construction of a grocery store.

As identified by ICI Vice President of Operations Tim Jackson, incorporating space for in-store order fulfillment is relatively inexpensive when compared to the total cost of the project, but the cost nearly doubles when attempting to construct a pickup area after the store has already been built.

Planning ahead will make the difference between successful, inexpensive adoption of a powerful value addition to your floor plan and the rushed incorporation of an expensive afterthought to try and keep up in the digital marketplace.

 

 

Sources
  1. Report: Tubridy, Michael. “Click-and-Collect Seamlessly Merges Physical, Digital Consumer Channels: What U.S. Retailers Can Learn From Their European Counterparts.” International Council of Shopping Centers, Industry Sector Series. 14 Sep. 2017. Web. 9 Nov. 2017.
  2. Article: “Consumers Continue to Choose Physical Over Digital for Groceries.” Business Wire. 11 Sep. 2017. Web. 8 Nov. 2017.
  3. Report: “What’s In-Store for Online Grocery Shopping: Omnichannel Strategies to Reach Crossover Shoppers.” The Nielsen Company. Jan. 2017. Web. 11 Nov. 2017.
  4. Report: “The Future of Grocery: E-Commerce, Digital Technology and Changing Shopping Preferences Around the World.” The Nielsen Company. Apr. 2015. Web. 10 Nov. 2017.

 

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