5 Trends Defining The State of Digital Grocery

After many months off the conference circuit, Chicory was excited to attend Groceryshop, the leading event for grocery and CPG brands. We came out the other side with valuable insight on where digital grocery stands and what factors will define success for retailers, CPG brands and consumers as the industry grows.

Convenience and Purpose

The digital grocery journey is shorter than ever before: what used to be two-day delivery, became two hours, and is now a fifteen-minute delivery.

Convenience is no longer a category or channel, but a need-state. Five to ten years ago, convenience was defined by store location and hours of operation. But today, convenience is defined by the customer. Brands and retailers who can meet shoppers’ needs and wants throughout their shopping journey with as little friction as possible will come out on top.

Carrie Tharp, VP, Retail & Consumer, Google Cloud at Google said it best, “The journey of the future is easy, intuitive and helpful.”

Today’s shopper knows what they want, when they want it but also why they want it. Brands and retailers who can meet shoppers’ needs and make a positive social or environmental impact will have the ultimate opportunity to create stronger customer loyalty and win the competitive edge. 

Leaning into Tech

The rapid growth of online grocery led to many retailers increasing their digital presence. As shoppers were hesitant to shop in-store, the industry saw the adoption of ecommerce accelerate by five years. But the evolution doesn’t stop there.

The industry is currently experiencing the largest reinvention of the customer experience in recent history, largely driven by technology innovation and consumers’ demand for convenience. Shoppers are finally ready for these changes, and retailers of all sizes are thus coming around to the value of dedicating resources to ecommerce functionalities like shoppability. The adoption of emerging technologies helps both retailers and CPG brands advance toward a more frictionless shopping experience and ultimately improve our impact on lifetime value. After all, 85% of surveyed online grocery shoppers are likely to buy the same things weekly and 80% are likely to repeat previous grocery shopping orders.

Retail Media Networks: Validated

“Retail media network” is the buzzword in the proverbial halls of digital grocery. Networks from Kroger to GoPuff offer holistic solutions for the CPG community that align with overall goals, annual planning and key tentpole events. Partners in the CPG industry are expecting a suite of tactics, from traditional in-store merchandising to on-site media to off-site digital tactics, such as paid search and shoppable recipes. Brands see value in partnering with retail media networks, but there is still an ongoing challenge of talking to known customers, rather than filling the top of the funnel with new and lapsed customers. Retail media networks can offer measurement that provides a single view of the customer across in-store and online.

“The shift to digital dramatically changed the advertising ecosystem online. And, while we’re still waiting for the dust to settle, it’s clear that retailers hold the golden key to digital shopper marketing, sales data and insights,” Yuni Sameshima, CEO and Co-Founder of Chicory shared. 

Customer Needs Collapsing the Funnel

Consumer behaviors toward food have permanently shifted in the last two years alone. According to a survey conducted in July 2021, 3 out of 4 consumers had shopped for online groceries in the last 60 days and access to their previous order history is the number one reason they continue to shop at their preferred retailer’s website.

Whether enabling quick commerce with faster delivery times, investing in scan-and-go check out in stores or bringing commerce to inspiration, every part of the experience will need to be upgraded to be customer-centric and convenient. Groceryshop 2021 was filled with third-party partners who can bring innovation and ease to the shopper’s journey, ultimately collapsing the sales funnel along the way.

The shift to digital dramatically changed the advertising ecosystem online and with that, embracing the right technology will be paramount in collapsing the sales funnel.

The Decentralization of Grocery

The undercurrent in the rise of online grocery is also the decentralization of grocery. 

“Consumers are no longer looking to the store as their one-stop shop,” Yuni shared as he took the stage in a panel on Technologies Reinventing Ecommerce.

The rise of store alternatives, like subscription services and marketplaces like Instacart, poses an existential threat to the way grocery used to be done. Consumers are spending far less time on the retailer site than they would have previously spent in the physical store. Consumers are buying products directly from manufacturers thanks to DTC sites. And, consumers can now comparison shop across multiple retailers in order to find the best solution, significantly influencing what gets purchased where.

For a brand or retailer to thrive in this new future of digital grocery, they must be consumer-centric. But improving the on-site experience isn’t enough. In this new paradigm, it’s all about meeting the consumer when and where they are doing their planning and shopping. The priority becomes reaching shoppers in the right place at the right moment. This is contextual commerce: creating shoppable moments where consumers are actually shopping. For brands and retailers, recipes become the most scalable way to reach consumers in this new decentralized world of digital grocery.