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eCommerce Grocery Success Requires More Than Technology

Priya A. Shah, GrocerKey Content Writer

Successful eCommerce grocery businesses rely on modern technology to provide customers a great experience. However, technology is just one piece of the puzzle. There are many considerations to take into account beyond technology. In order to fully succeed in eCommerce grocery, retailers need a complete solution that addresses each facet of the business leading to both profitability and sustainability.

Elements of an eCommerce Grocery Business

A well-designed eCommerce grocery business consists of four cohesive elements all the way from bringing customers into a retailers digital ecosystem to ensuring they are retained.

Customer Acquisition

Customer acquisition strategies in an eCommerce grocery business are critical given that you can’t rely on a physical presence. This is not an “if you build it, they will come” environment. New customer acquisition can be done through various channels such as paid search campaigns, paid social campaigns, and referral programs. Retailers can also bring current customers into the funnel by leveraging existing marketing channels such as; in-store signage, email lists, print & digital circulars, radio/tv ads, etc.

With the right technology partner, you will be able to establish Customer Acquisition Cost along with Lifetime Customer Value to ensure appropriate ROI on your marketing initiatives.

Digital Engagement Platform

Your digital engagement platform will likely allow customers to build a shopping list, add items to their cart, and seamlessly place orders. It’s also becoming increasingly more critical to offer a personalized, authentic experience.

While it’s important to work on the front-end capabilities and experience, don’t forget about the back-end capabilities, which typically have a greater impact on the customer experience.

Order Fulfillment

Customers will recognize retailers that are mindful about their order fulfillment strategy because of the value and impact on the overall shopping experience.

A robust order fulfillment application will allow you to accurately pick products, select substitutions based on the customer’s preference, and provide real-time updates to the customer when their order is ready for pickup or when their delivery is on the way.

Your team’s ability to pick, pack and deliver orders efficiently, accurately, and on-time will play a major role in determining whether your eCommerce business succeeds or fails. There are great solutions that you can adapt to your business to make this happen with your in-house staff. Alternatively, retailers can maintain control of their brand, while benefiting from skilled labor efficiently deployed via third-party labor for pick & pack and outsourced last-mile fulfillment.

Customer Retention

Customer retention is built on trust, communication, and convenience. To keep your current customers happy and coming back for more, it’s important to get the basics right. Once you’re able to deliver a great experience, there are a number of retention tactics that can be utilized to stack the deck even further in your favor.

The key is to keep customers active with retargeting campaigns, branded paid search campaigns, and promote a referral campaign that’ll turn your best, loyal customers into brand ambassadors. Retailers need to create a first-time customer offer that’ll make the second, third, and even fourth order much more likely. As the GrocerKey data (below) demonstrates, retailers are in very good shape once they get a customer to place a 2nd eCommerce order.

Customer Retention StageLikelihood of Incremental Order
1st order placed57.51%
2nd order placed71.83%
3rd order placed77.89%
4th order placed82.44%

5 Elements That Go Beyond Just Technology

Technology is an important component to your digital grocery business but there is much more to the puzzle. Let’s take a look at 5 key elements that will help retailers achieve eCommerce success.

  1. Strategy – Your strategic approach to assortment, pricing, pickup / delivery fees, and digital merchandising have the potential to make your eCommerce grocery business stand out among your competitors. You’ll need to experiment through trial and error, but your approach will likely need to embody the same elements that make your brick and mortar stores succeed.
  2. Data – You need to get your data right when it comes to your customers and your assortment. Well organized customer data can help you reduce friction by allowing first time eCommerce shoppers to access their in-store purchase history. Your product data will have a significant impact on how efficiently customers can browse your eCommerce experience, locate and discover items of interest, receive targeted recommendations, select desired substitutes, and add items they may have forgotten. Whether you’re new to the eCommerce world or have been in the game for a long time, your product data likely needs to be elevated and adjusted accordingly as your customer base grows.
  3. Corporate Alignment – After you’ve settled on a strategy and cleaned up your data, it’s critical to have buy-in from every department of your organization, just like you would for your brick and mortar stores. Whether it’s customer service, marketing, or IT, every department should be aligned on your eCommerce strategy at a corporate level.
  4. Your Store Team  – The way you guide and communicate with your team — like any operationally intensive business — matters! Your store team will be responsible for executing the strategy you’ve created at a corporate level, so it’s important they understand your eCommerce goals and objectives.
  5. Incentives  – One of the most effective ways to create a buy-in at the store level is to reinforce the cross-over between eCommerce and store level performance by aligning the store level incentives between the two. There’s nothing more integral to the success of an eCommerce grocery business than buy-in at the store level, and this method ensures success both offline and online.

Iteration and Innovation

As your digital grocery business grows, you’ll notice that your strategy will have to be tweaked. You’ll have to consider customer feedback, analyze performance, evolve into new fulfillment methodologies, continually improve the quality of your product data, and create new revenue streams (i.e.; CPG monetization, membership programs, endless aisle, etc).

A technology partner who can support you, guide you, and help grow your business is imperative! When you don’t have all the answers, you’ll need to lean on a partner to keep you on track. Consider a partner who offers complete solutions rather than simply licensing you a technology platform.

How has technology affected your eCommerce business experience? Let us know in the comments!

If you’re ready to build or grow an eCommerce grocery business, reach out!

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