Why so Many Grocery Retailers Are Now Offering Direct Shipping or Curbside Pickup
Published May 16, 2019
Why do so many consumers utilize Amazon Prime, making the company that originally started in one man’s garage even more of a business production output conglomerate? What about the increased amount of cars parked in the curbside pickup zone at the nearby Target, or the increasing number of delivery packages piling up on nearly every front porch? Where are these consumer trends coming from?
At INSITE, we attribute the answer to the question of increased direct shipping and curbside pickup to a few factors: evolving consumer priorities, an increased appreciation for convenience, and solid forecasting. These points affect more than the grocery industry and affiliated food packaging companies, and we believe they offer useful insight into the CPG and SPA industries as well. If your company is looking to get (and stay) ahead in the CPG or SPA industry, this post is for you.
Delivery or Pickup
In a world in which time is becoming our most valuable commodity, grocery brands are in a state of constant competition to best meet their consumers’ most immediate needs – or risk losing their business. To accomplish this and increase customer retention, the concepts of direct shipping and curbside pickup were introduced. Direct shipping or delivery is the process of sending a product directly to the consumer’s door. Alternatively, consumers utilizing curbside pickup shop at a certain store using a website or app and drive up to the brick and mortar store – or another marked location – to pick up their products.
INSITE’s Analysis
Heavily utilized by big brands (we already mentioned giants Amazon and Target), direct shipping and curbside pickup features are growing in popularity, as they have been carefully designed with consumer priorities, convenience, and evolving customer trends in mind.
Priorities
Steve Bishop, managing partner and co-founder of Brick Meets Click, a consultancy for grocery retailers, thinks the push towards more evolved delivery options is logical considering recent shifts in consumer priorities. He says people are increasingly shopping for groceries online, and that order delivery, along with varied pickup options for web orders, is crucial for grocers who want to successfully compete within the market. This priority shift makes sense in light of that old adage that time is money.
Convenience
Thanks to artificial intelligences like Google, Siri, and Alexa, adding items to a digital shopping list or online cart is as simple as speaking the command out loud. Research shows that online food sales in the U.S. grew 31.5 percent or $22.1 billion in 2016. This figure is double the growth of last year’s e-commerce growth as a whole. To further illustrate this point, Walmart now has 1,200 grocery-pickup points, a major increase from the 800 the company had mere months ago, and many other businesses are following suit. Ultimately, the convenience of online shopping, direct delivery, and newly developed pick-up options make grocery retailers who utilize these options far more attractive to busy, modern consumers.
Evolving Trends
Forbes notes that the grocery industry took far longer than most other retail industries to digitize, but it has finally come around to these emerging trends that stand to play a large role in the ongoing success of companies. Similar to other industries, the grocery response has been to focus on and invest in the customer experience. Grocery retailers can no longer settle for selling quality foods. Instead, stores are buying into the trend of offering consumers a total-package experience by improving not only their in-store shopping experience but their ecommerce sites as well.
How Do These Trends Affect the CPG and SPA Industries?
For CPG and SPA producers, it’s important to pay close attention to grocery retailers and the useful foresight they can provide. Since consumers are guiding an industry-wide shift in the way grocery retailers market and sell their products, we can expect the packaging for different food products to shift as well. Winsight Grocery Business offers food packaging companies a few key insights to help them recognize trends and adapt their practices in the face of this shift.
Big Brands Still Matter – But Don’t Overlook Private Labels
Private label brands are on the rise, and research also shows that national brands are still in high demand. In fact, Winsight explains that shopping trips driven by national brand purchases are more valuable than private label brand trips on by 65 percent on average. What is your company currently doing to attract the business of both big brands and private labels? What other processes could be implemented that might improve existing efforts?
CPG Is Going Digital
Sandy Steier, CEO and co-founder of 1010data, recommends that brands seek to balance the dynamics of online retail partners that also have private labels. Market fragmentation, like unexpected competition for established brands, is to be expected since the online market is more easily accessible than brick-and-mortar retailers. If your food packaging company is currently serving brands with only physical locations, consider how you might reach more retailers and widen your potential consumer base.
“Foodies” Are Now a Target Consumer Base
As consumers’ interest in food increases, thanks to factors including increased global tourism and the increasing availability of unique online recipes and food forums, it is crucial for retailers to consider providing increased dimension that can meet the cravings of their food-loving customers. As retailers begin catering to broader inclinations, are you widening your CPG or SPA offerings to capture the business of those retailers serving this new consumer base?
Shift Confidently With INSITE
Do you feel confident in your company’s ability to adapt to the changing grocery retail market? At INSITE, our mission is to bring clarity and understanding into the automated packaging industry, providing your company with a fresh perspective on your brand and working to simplify your packaging process with high-quality machinery. Contact us today to learn more about how INSITE can help you move forward.