2018-03-20 14:54:50 Running a Business English Find out why online grocery delivery services could become a game changer. See how your small grocery store can continue to do well even... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/03/Grocery-Store-Owner-Examining-Products.jpg https://quickbooks.intuit.com/ca/resources/business/small-grocery-business-compete/ Can Your Small Grocery Business Compete wWth Online Grocery Delivery Services?

Can Your Small Grocery Business Compete with Online Grocery Delivery Services?

3 min read

Consumers are already ordering more of their everyday essentials from their computers and smartphones, and now online grocery delivery services are looking to take over that industry. While you may not be seeing these services affect your revenue just yet, ignoring them would be a serious mistake.

Are Online Grocery Delivery Services a Real Threat?

If you look at the numbers for online grocery purchases, they probably don’t seem too threatening. Although it’s tough for researchers to determine exactly how much grocery shopping is done online, the general estimate is about 2 to 4 percent in the United States, as of 2016. Online grocery shopping is even less popular here in Canada, but it’s predicted to grow to $3.6 billion in annual sales by 2019, according to a Forrester Research estimate. It has been trending upward fast in the United States, though, and it’s popular among Europeans, particularly those living in dense urban areas.

Even though interest is low right now, it’s growing incrementally, which could mean a huge shift in buying behaviour is on the way. That tends to be the pattern when e-commerce sites disrupt an industry that was previously dominated by brick-and-mortar stores: A small segment of consumers begin buying a product online, this catches on with more people, and then everyone is doing it almost overnight.

Keep in mind that there have been all kinds of products that supposedly could never be purchased online, such as clothes and shoes. It turned out that they could, and there’s no reason groceries turn out any different.

Building Customer Loyalty

The good news is that there’s more customer loyalty with grocery stores than with many of the other categories of retailers that were impacted by online shopping. Customers may have visited bookstores and clothing stores once a month or less. On the other hand, grocery stores generally have customers who visit frequently, often several times per month, which builds a stronger connection between those customers and the store.

You probably already have a solid customer base, and with the right approach, you can keep them coming to your business even as online grocery shopping gets more popular. One effective option is to focus more on specialty products. Customers often go to larger supermarkets to get the basics and visit smaller shops for those niche items. If your small grocery business has a fantastic deli or a huge variety of meats, that could be its calling card that brings customers back every week. It’s also good to focus on the in-store experience, as that’s something online services can’t replicate.

Preparing Your Store for the Future

To avoid missing out on a growing group of shoppers, consider offering at least some sort of online ordering system. There are three popular options:

  • Let customers order online and pick up their order at your store
  • Deliver groceries to your customers using your own delivery drivers
  • Deliver groceries to your customers using delivery drivers from a third-party service

Letting customers pick up online orders has proven to be effective for many major retailers. To deliver groceries to the customer’s door, you need to decide if you’d rather have your own employees do it or contract the job out to a grocery delivery company, such as Instacart. Since you’re delivering perishable items, you may find it easier to have another company handle the job, as you don’t need to do any training on your part or give your drivers the right supplies to keep food cold.

It’s not a matter of if but when online grocery delivery becomes commonplace. Preparing now can help ensure your business’s success as your industry changes.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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