Marketing from the Grocery Aisles: Omnichanneling

I went down the street to the 24-hour grocery.
When I got there, the guy was locking the front door.
I said, ‘Hey, the sign says you’re open 24 hours.’
He said, ‘Yes, but not in a row
.’”

Steven Wright, American Comedian

According to a study recently released by Door to Door Organics, 54% of U.S. online grocery shoppers say they have increased the amount of grocery shopping they do online, over the past year, by an average of 29%.

With no additional context, this is a moderately “yawn-worthy” statistic. After all, improvements in mobile apps make it easier to purchase online, using smart phones and tablets. And with people having less time to meander through grocery stores, it makes sense to do online shopping from work, while taking a break, riding on mass transit, during meetings, and even waiting for the light to turn green.

Nevertheless, the survey pointed out only 13% of shoppers say a single store – online or offline – meets their weekly grocery shopping needs. During a typical week, 34% of respondents shop at two, and 53% shop at three or more online or traditional brick-and-mortar grocery store.

Providing customer with a variety of channels in which to research products, and make purchases is called omni-channel. These channels could include retail, online, and mobile stores, mobile apps, telephone, and catalog.

Evolving Retail Strategy

The STORES Magazine and Kantar Retail annual Top 100 Retailers report reveals the most successful retailers are those catering to consumers’ evolving shopping preferences by enabling them to shop through multi- or omni-channels. Anne Zybowski, vice president of retail insights at Kantar Retail, uses the terms “channel-agnostic” or “channel-agile” to describe how retailers must sell across all channels. To further succeed, they should personalize shopping experience through meaningful customer engagements.

rajalary Shop FreeIf you’re been to Walmart.com, you’re aware of their vast online presence, selling everything they offer in their retail locations, along with web-only specials that can be ordered online, and then picked up at local stores a days later. This omni-channel approach landed them in first place on the 2015 TOP 100 Retailers list. 

In second, and nine place are two grocery chains: Kroger and Safeway, which have delved into multi-channel strategies with online presence that enables consumers to shop online, download coupons to their store rewards cards, manage and refill prescriptions, and support local nonprofit organizations every time they shop or use their store rewards card.

Just like grocery stores, pharmacies like Walgreen (#5) and CVS Caremark (#7) are strengthening their reach with online services that include digital coupons, prescription refills, photo printing and books, appointment scheduling and payment for onsite healthcare clinics.

Home improvement box stores, Home Depot (#4) and Lowe’s (#8) also made the list with an expanding menu of online shopping and services, including savings on over-stocked items that are only available online.

Blending Shopping Experience

One aspect of omni-channel is online product research. Enabling customers to learn about products before they walk into a brick-and-mortar helps them make better informed decisions, and increases their confidence in purchasing higher priced items like appliances, furniture, tools, and electronics.

According to Gerald Storch, chief executive of Hudson’s Bay, parent of Saks Fifth Avenue and Lord & Taylor, “Increasingly, consumers don’t think about stores as physical locations, they think about stores as brands they interact with.” For department stores, he adds, “The opportunity is to start customizing that on a mass scale so you simulate the personal selling experience on a mobile device. I believe that’s a big opportunity down the line.”

The focus on consumers is what differentiates omni-channel from multichannel retailing. In the past, companies had separate management, inventories, and pricing for each channel. Melding the channels not only leverages economies-of-scale, but enables shoppers to seamlessly transition from one channel to another. Product that are researched online can be purchased online or in retail locations, and vice-versa.

In addition, customers’ personalized information is accessible and coordinated through all channels, whether shopping via PC, smart phone or tablet, or in person. This concept helps quell shoppers from researching a product in a store or online, and then making the purchase from a lower-pricing ecommerce site like Amazon or eBay. Immediately rewarding a shopper’s presence by providing an on-the-spot incentive, such as a coupon to purchase at a retail location or through their store’s ecommerce retains customers and fosters loyalty.

Motivation speaker Dale Carnegie once said, “A person’s name is to that person, the sweetest, most important sound in any language.” Providing a personalized shopping experience – through multiple channel – has the same effective.

Dynamics of Retailing

The 2015 TOP 100 Retailers list holds some interesting surprises, including technology superstar Dell ended up last place in spite of using a range of channels, including online, telephone, catalog, and placement in retail locations like Microsoft Stores.

The list is ranked according to 2014 USA retail sales, with Walmart having over 343 billion (over $508 billion worldwide), and Dell with nearly $4 billion, a 5.8% decline from 2013. Dell’s decline, therefore, isn’t related to their channel strategy, but a decrease across the entire industry in PC purchases.

Amazon also slid a little lower in the list to ninth place with over $49 billion (over $83 billion worldwide) in US retail sales, significantly below Costco in third place with nearly $80 billion in US retail sales, and over $111 billion worldwide.

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One comment

  1. Makasih atas infonya , Adria

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