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Online grocery – a market with a huge potential. Part II

In part I, it was mentioned that efood merchants have to face 2 big challenges: gaining customers and their loyalty. Here are some proposals how to manage both successfully.

Customer acquisition:

In order to gain new customers, online food retailers should focus on their offer’s added value – connecting it to an attractive price promise. Moreover, it is essential to gain customer loyalty also for fresh products. For example, with the help of a transparent and efficient supply chain, fair return possibilities, a large offer of information and an elaborate customer review system. Doing so, the online food retail can become an attractive alternative to the brick and mortars.

Furthermore, special auxiliary and ancillary services, like predefined cart composition, individual product branding, or subscription and flat-rate offers, can render ecommerce models in the food trade industry becoming a more attractive option to the broad public.

“E-Commerce is interactive commerce. The individualization according to customer preferences is an animus counterpoint to the hardly emotional purchase in the brick and mortar grocery store”, claims Alexander Ertner, Vice President of the Working Committee for food trade, bvh.

Customer loyalty:


Hardly one online food retailer ever succeeded in gaining customer loyalty of occasional buyers. However, already by now promising concepts make some online shops for regular customers more attractive: For instance, a loyalty scheme in connection with customer profiles or a wish list functionality ensuring that the product range is always adapted to customers’ needs.

Joost W. van der Laan, independent consultant of Retail Economics, sees the possibility to quickly react to customer feedback as a major advantage of online retailers against brick and mortars: “The most promising communication feature is the possibility for customers to respond to the retailers information and marketing mix elements. A retailer may solicit assortment suggestions and complaints. Internet makes it possible to use customer complaints as powerful drivers for quality improvement in the company.”

Retailers operating web shops should also focus on an easy customer journey. Only by doing so, customers are willing to return. The correct interpretation of the search query can be sales relevant and avoids losing the customer to the competitor, who is only one click away: Due to the product labeling used in the food trade, it happens that a query for “paprika” leads to the spice, or “beef” indicates cat food. With the help of the search and navigation solution from FACT-Finder REWE, a German multichannel retailer with about 50 million annual turnover and affiliates in 13 countries, succeeds in managing those challenges. Also in B2B the quick detection of the right products plays a crucial role, since purchasing for the company’s use doesn’t make the customer more patient than for the private use.

Thus, the Swedish food wholesaler Snabbgross, part of the famous Axfood concern, has integrated FACT-Finder in its web shop.

Here is an overview, with which tools web shop operators increase their usability, thereby achieving a higher customer satisfaction and turnover:

  • The error tolerant search functionality simplifies the detection of the right products considerably.
  • The dynamic navigation shortens the query tracks in the shop.
  • Merchandising campaigns: With banners, pushed products, landing pages and more, it is possible to create an appropriate shopping atmosphere and to influence selective search results.
  • Ranking-Management: According to Business Rules and customer requirements relevant products can be indicated first – just like in brick and mortars, where products are placed in eye-level displays for better sales.
  • The Recommendation Engine increases Cross- and Up-Sellings.
Quickly finding the right product and getting it delivered: With high usability on the website, offers total shopping convenience.
Quickly finding the right product and getting it delivered: With high usability on the website, offers total shopping convenience.

Editing product data – secure your lead.

In comparison to brick and mortars, online pure player are saving costs on the sales area and sales force. These economized resources should be invested in the right areas.

Dr. Mirko Warschun, Partner at A.T. Kearney, gives recommendations how online retailers can boost their success:

“Retailers could profit from the fact that in the Internet it is much easier to implement a clear connection of product and other specific information than in a supermarket. In contrast to the offline world, where investments in screens or the like incur, information in the internet can be made available, updated and adjusted to the current offer just one click ahead. Additionally, with the help of intelligent up- and cross-selling methods the average receipt can be increased.“

Delivering the right content to the right customer – this is essential for high turnovers and conversions. Andreas Wagner, Product Manager of FACT-Finder, argues:

„Investments in product data and content reach the ROI the quickest, when made available to the customers via search and navigation functionality. Thus, content delivery is as important as content generation.“

Part III is all about most profitable business models for grocery merchants. So, do not miss to visit the FACT-Finder Blog on Monday the 30th of December!

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