Consumers go mobile to buy groceries online
Mobile devices are increasingly becoming a larger part of the retail experience. Whether consumers use smartphones to comparison shop while in stores or place orders online using tablets, the trend is clear. Now comes further evidence of consumer adoption from Peapod, the online grocery delivery service, which has its own mobile tale to tell.
Peapod CMO Carrie Bienkowski told Digiday that one-fourth of new users of the service use mobile devices to begin and complete orders. Thirty-four percent of all Peapod users, up from 25 percent last year, no longer use a desktop computer to place their orders.
One key area of emphasis for Peapod is using the data insights gained through mobile app to increase personalization. The company also believes it can use native advertising on mobile devices to develop a deeper connection with its customers and influence purchasing levels.
“We should think more like a fashion retailer to tap into the micro influencer communities and inspire great content,” Ms. Bienkowski told Digiday. “But we don’t want to focus [only] on a young audience because the notion of online grocery is not just for Millennials.”
Peapod is operating in an increasingly competitive market. Major pure-play e-tail and brick & mortar operators, such as Amazon.com, FreshDirect, Kroger and Whole Foods, are investing in the space.
Last year, Kroger announced plans to expand its ClickList online grocery ordering and in-store pickup system to nearly 45 percent of its locations. The service, which includes a $4.95 fee for regular orders and $7.99 for expedited ones, gives customers a choice of 40,000 SKUs from which to order. Customers submit their orders online and then arrive at the store at a designated time where store staff load orders in their cars.
Whole Foods Market has just confirmed making an investment in Instacart, which handles online deliveries for the upscale grocery. The two companies, which began working together in 2014, have renewed their partnership for another five years.
“We’ve seen how much our customers love this fast and convenient way to receive Whole Foods Market groceries right to their door, so we are excited to extend our relationship with Instacart,” said Walter Robb, co-CEO of Whole Foods, said in a statement. “Working together, we will continue to find even more ways to create outstanding shopping experiences — whether they’re happening in the digital space or within the four walls of our stores.”
- For Peapod, online grocery is becoming a mobile business – Digiday
- Kroger’s customers love to order groceries online – RetailWire
- Whole Foods Market and Instacart announce new markets, growth plans – Whole Foods Market
- US Mobile Phone And Tablet Commerce Forecast, 2015 To 2020 – Forrester Research
Source: Instacart
Discussion Questions
DISCUSSION QUESTIONS: How do you expect mobile devices will influence the future development of the online grocery business? Will the use of mobile devices enable online grocery to develop more personalized offers, native advertising, et al to achieve deeper connections with customers?
Poll
BrainTrust
Max Goldberg
President, Max Goldberg & Associates
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
As mobile influence grows in e-commerce, so it will grow in grocery. That said, it’s still a very small player in the overall grocery business.
Grocers should be using their vast stores of customer data to personalize offers and make it easier for consumers to shop, both online and in-store. Retailer apps need to automatically load coupons, facilitate shopper-specific offers, create shopping lists, check out and record loyalty points, all from any mobile device. This is how grocers will achieve deep connections with customers, not through showy bells and whistles.
M-commerce is the future. It is soaring globally, with growth markets literally skipping the desktop phase. As more merchants truly optimize for mobile by reducing numbers of clicks required to shop and simplfying the interface, more shoppers will be comfortable moving completely away from desktop.
There are very innovative retailers around the world that are capturing data from new sources like social, news, weather, local events, etc., that have been able to personalize shopping like never before. Great tools are on the market today to take advantage of this data to enhance the mobile shopping experience.
Peapod’s results around mobile activity mirror those of other retailers and the industry as a whole. A large number of shoppers across all demographic profiles are now interacting with retailers primarily through mobile devices.
Online grocers by definition should be embracing personalized offers and native advertising. These advancements are not driven by mobile devices per se, but by the analytics and applied marketing around shopper data. Using shopper data intelligently and offering a great mobile experience are two vital capabilities for retailers to develop in the coming years.
I think the actual ordering of groceries online will continue to be done from a desktop (home or office) or mobile (on the go) device. special offers by the retailer to the customer will become more prevalent on mobile devices, with a “Buy” button or “Add To My Shopping List” button included with the personalized offer.
I continue to like the concept that irrespective of the medium, customers will order more of their groceries online, but will drive by the grocery store on the way home to pick them up.
The personalized offers to mobile devices and direct connection with the customer will have another unintended consequence: the demise of the grocery newspaper insert with which many of us grew up.
Mobile will be a strong influencer but will be very low in the actual purchase point for food. Same as mobile is now in other retail sub-verticals. People research and pre-order or reserve with mobile but the actual sales via mobile are lower than all the mobile freaks expected. This is even true with Millennials and the other bizarre younger groups. This varies in some unique cases, but mobile is a promo tool and a research tool and new apps should stick along those lines.
Online is going to grow exponentially. Some estimates predict a 17 percent share by 2020. The movement of more brick-and-mortar food retailers into the online space makes these estimates even more realistic. Mobile devices represent the modern day version of BYOB. However, instead of BYOB it is BYOS, Bring Your Own Screen.
No doubt the technology is there to personalize offers. In addition, mobile devices represent an opportunity to better engage, meaning listening rather than simply selling to its users.
With questions like this we are making the same mistake retailers have made with brick-and-mortar versus online. We are building silos. The digital future will not be mobile versus desktop it will be a confluence of tools that work together. In five years we will see automatic ordering of staple products without personal involvement. Neither mobile nor desktop. In a few more years we will see smart shelves, smart refrigerators and anything that simplifies the grocery shopping process. That is what retailers should be looking at. If they are not looking at it now, once it happens, they will never catch up.
I believe shopper adaptation to mobile is more about the improvement in bandwidth and ergonomics (size) of mobile devices as opposed to the content and value shoppers receive on their devices. To that point, to keep the momentum in mobile moving strongly forward, retailers and other content providers need to crack the code on accumulating enough content so that it can be targeted and become increasingly relevant to the shopper.
Thus far, most single retailer apps have an inherent problem of providing sufficient relevant content through their proprietary app to make it a compelling part of the shopper’s routine.
Further, proprietary retail apps are designed to deepen the relationship between one specific retailer and a shopper. However, the time-starved shopper is looking for an app that provides the broadest utility across ALL the retailers they frequent. Accordingly, shopping aggregators like Key Ring, LOC and Favado are gaining some traction, even without active participation from the retailer. My guess is that shoppers will ultimately dictate the direction retailers must take to satisfy their mobile shoppers. My guess is that single retailer apps are not poised to be a viable long-term option.
There is still uncertainty regarding any either/or scenario when it comes to forecasting online ordering and particularly mobile. We’re curious for example why shoppers’ mobile access of retailer websites in our network capped out at about 37 percent six months ago after climbing steadily for the past two years. Is there a functional limit to those that use mobile and those that simply do not? Mobile is the preferred channel for some, desktop for others, and for a majority of shoppers they’re going into the store without a digital engagement in advance. The majority of grocery shoppers may simply not be die-hard planners … The challenge is getting relevant offers into their hands!
Any closed app whether computer, tablet or mobile allows for better personalization. As long as the retailer knows who the shopper is and has collated their data to serve the customer, they’re in!
Mobile is still not the platform of choice for lengthy transactions but what it does offer is convenience. Maybe you have a last minute addition to the list?
Mobile also addresses the last several yards of delivery. Hit the app or text when you arrive and the groceries are brought out to meet you.
It is certainly here to stay but I’m not ready to say that it will drive business.
But that’s just my 2 cents.
Sorry I just don’t get this obsess … er … preoccupation with mobile. Other than using it for pricing and comparison shopping — which, admittedly, could be important for price-centered retail models — the choice of WHICH device to use, be it desktop, laptop, smartphone or a microchip embedded in the brain, is largely irrelevant. Whether a person orders groceries from their desk at home over a modem, or with a phone while sitting in a parking lot, it’s still the same…an online order. And in the case of grocery, I just don’t see this being a large share of the market anytime soon, if ever.
I believe mobile will have a huge impact in both the online and bricks and mortar grocery business. Today’s customer is wired. They are online with their mobile/tablet/laptop device(s) at all times and want an easier way to shop for basics anywhere, anytime, in any way, with any device they happen to be using at the time.
Proximity marketing/promotions coupled with guided selling is creating an intimacy in other segments of retail that are beginning to trickle down to grocery. I believe the Kroger model of BOPIS will be ubiquitous within a year while the Whole Foods investment in Instacart is money well spent. The earlier failure of grocery home delivery companies like Webvan and NetGrocer predated GPS and Traffic Monitoring Systems … is it any wonder they failed? The new generation of proximity marketing/promotions and guided selling, BOPIS technology and GPS Traffic Monitoring System based home delivery will reinvent the supermarket.
According to ComScore more than 60% of US Digital Media time is spent on mobile, and in 2015 the number of people who ONLY use mobile surpassed those who only use computers — it’s clear that grocers’ customers want them to be available via mobile.
PeaPod would have the data, but I suspect mobile customers make more frequent smaller orders, spread more evenly throughout the day than people who order on desktop. Impulse purchases are available all day — not just at the computer — and mobile users probably expect faster fulfillment as well.
This is just another way to make the customer’s experience easier. Imagine taking a bus or train home from work — or your the passenger in the car (car pooling). On the way home you do your grocery shopping over your mobile device. An hour or two later you venture to your local store and the order is waiting for you. Or, maybe it’s delivered. It’s all about making it easier on the customer.
And, the data that is collected will be invaluable! Knowing what a person buys, when they buy, the time of year they buy and how much they buy is just a starter. The opportunity to personalize promotions is limited by the retailer’s imagination.