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Grocery retailing has gone digital. Have you?

By Dave Howard

Ecommerce is redefining the retail-shopping experience – and shaping the fate of many retailers. Borders is gone. HMV is struggling to revive its retail presence. Best Buy is still living down its reputation as “Amazon’s showroom.”

Today, ecommerce accounts for more than $1 trillion in retail sales worldwide and is projected to grow at a double-digit rate for years to come.

However, while it has redefined the shopping experience in categories such as music and books, grocery has remained relatively unaffected. Two-thirds of shoppers have bought products online, yet only 13 percent have bought grocery.

Barriers for grocery retailers include heavy upfront investments, logistical challenges associated with delivering perishable items, and the inherently low margins associated with selling food.

Webvan, one of the first purveyors of pure play online grocery remains one of the largest dot.com flops in history. We are now beginning to see some sustainable models in online grocery, however far more retailers have taken a “wait and see” approach.

The dynamics are rapidly changing. As shoppers become comfortable buying more categories online, traditional grocery items are being added to the list. Today online grocery is growing at nearly twice the rate of any other industry.

The grocery retail world was rattled yet again when Amazon.com announced its expansion of AmazonFresh into new markets and Alibaba partnered with Costco to sell their items in China without having a single physical store.

The time for action is now. Whether your goal is to be a market leader or follower, you need to determine how you are going to position yourself for success in this the digital marketplace. No matter which side you’re on – retailer or supplier – no one is immune.

If you doubt the implications to your business, think about categories such as diapers and pets, once the preserve of supermarkets, that have now moved online. There is no one strategy that is right for every brand and retailer, but Brand View can help you develop a road map that will help you win online.

Our thought provoking white paper – What are the key factors in closing an online sale? – offers insights, facts and advice to help you navigate the rapidly changing online retail environment.