As a result of the coronavirus pandemic, total grocery sales jumped 300% in early 2020. Grocery e-commerce benefitted from this and continues to do well in 2021, reaching nearly $10 billion of sales in the US alone.
The acceleration of grocery ecommerce favors those who lean in, adapt, and make the right investments to stay ahead of the curve. Those retailers that win customers now have a greater likelihood of retaining them in the future, and there’s still a lot of room for innovation and refinement.
Now let’s get into five trends that you’ll likely see over the next year.
Grocery Ecommerce Trends 2021
1. The Driving Forces of Gen Z and Millenials
As digital natives, younger consumers are driving the growth of the ecommerce market. Here’s a quote from Bo Finneman, a leader in Sales and Marketing for McKinsey and Company, in an episode of the McKinsey podcast:
“We’re really looking at them (Gen-Z) as the core influencers today that have a really big impact on both millennials and Gen Xers in terms of what they buy. They’re looking beyond tangible products and actually trying to understand what is it that makes the company tick. What’s its mission? What’s its purpose? And what is it actually trying to build for us as a society?”
– Bo Finneman
From a real-life “Gen-Z’er” (yours truly), here are some values and thought processes that younger generations look for in brands.
Consistency: They want reliability and consistencyーis this food economically smart, does the company have morals, is the process for online browsing and ordering intuitive? They (we) use these principles whether shopping in-store, through an app, or on a website.
Personalization: Engaging with brands on our own terms is empowering. Utilizing tools like social media marketing alongside personalization will boost conversion metrics by creating a more tailored, connected experience for specific age groups.
As many of us have transitioned to working from home, new foodie trends have emerged such as going healthy, frozen options, global flavors, and a rediscovered passion for cooking.
This year, Kroger expects to see a boost in food and beverage products featuring functional benefits to support immune health, digestion, cognitive health, energy levels, and stress management.
Another topic that coronavirus highlighted was our impact on the planet, particularly through our diet. Brands such as Amazon have already taken the pledge towards sustainability, and other ecommerce brands are likely to follow this trend as we continue to look for ways to reduce waste and preserve healthier eating habits.
2020 tested supply chains to the limit and groceries bring their own particular set of challenges in this respect. According to Elizabeth Bennet, VP Global ecommerce at the Kraft Heinz Company, there are three models used by ecommerce grocers to serve customers:
Home delivery – customers complete all stages of purchasing digitally: discovery, transaction, and in-home delivery.
Last Mile – shoppers complete the discovery and purchasing portion of the journey, but an intermediary business, like Instacart, completes the home delivery.
Click and collect, or BOPIS – consumers buy online and pick up in-store (or, outside the store).
During the pandemic, data shows that overall Click And Collect is the preferred method of online grocery shopping. However, with attitudes continuously changing, retailers will need to service current consumer preferences but agile enough to adapt or scale when faced with shifts in behavior.
4. Consumers are trying new brands, while brands strive to keep their loyalty
A McKinsey survey found that 75% of consumers tried a new shopping behavior since COVID-19 started and 73% of those who tried a different shopping method or brand intended to continue.
According to a Hubspot study, consumers are less trusting of the brands they buy from as much as they used to in the past.
Michael Redbord puts it best when he says that “customers are a source of growth you already own, and a better and more trusted way for prospects to learn about your business. The happier your customers, the more willing they are to promote your brand, the faster your flywheel spins, and the faster your business grows.”
So, what are the big players doing in 2021 to keep retain customers?
Marketing personalization is BIG. To help illustrate this, 40% of executives say their customer personalization efforts have directly affected sales and profits in channels like ecommerce.
For online grocery stores, personalization can take the form of recommendations based on a customer’s preferences. Retailers are also combining their platforms with meal-planning apps and recipe sites that build shopping around days and dishes, not just individual items.
Strengthening Customer Relationships
After implementing useful and personal customization to their grocery apps, large companies like Amazon Fresh and Walmart continue to unveil loyalty programs. We’re seeing bigger grocers like Hy-Vee incorporate a personal shopping service, free deliveries, and dedicated customer helplines and chatbots to maintain relations with customers.
5. Social Media and Influencers
This is a great place to demonstrate your expertise in your industry and create a loyal group of customers who have a finger on the pulse of their audience. Jordie Black from ZINE’s influencer marketing program states that:
“Many eCommerce brands have a content problem – in that they are unable to create enough content at scale to support their marketing efforts. In 2021, a trend we will see is brands looking to influencers as content creators to support the content creation process in lieu of a content agency. We’ll also see brands add paid media spend to this content so that they can control the reach and audience.”
We all know that marketing costs are skyrocketing with freelancers and professionals truly understanding the money-making industry that they are a part of. To bring everything together, we know that younger generations have the most influence over the ecommerce market, there is no denying the need to focus on social media presence to provide value to the customers.
By creating an impact over social media, younger consumers continue to buy from brands that offer a personalized experience, as it makes them feel wanted and adds efficiency to the process.
Shopping to have an impact is important for them (well, us) knowing who is promoting something can change everything. Does this company support charities and actually do good, humane things in the name of food? Does the influencer have a good track record? Knowing is everything for this generation.
2021 promises to be another exciting year for grocery ecommerce businesses but, as we get on top of the pandemic, the share of online sales is expected to decrease. Competition will intensify and, as always, those businesses who listen to consumers and pay attention to trends will lead out eventual winners.