Keeping up with Amazon: Study explores strategies for small grocers as shopping shifts online

In a world where Amazon can deliver a bottle of wine to your door in under an hour, small grocery stores are struggling to keep up. By 2022, 70 percent of Americans will buy their groceries online. A recent University of Missouri study by Cara Mahon explored what digital strategies independent grocers can employ to keep up.

After sending experiment emails to a local grocery store’s customer list, Mahon discovered that educational emails (with no additional marketing messaging or incentives) elicit more trials of online grocery shopping than any other strategy.

Free home delivery was found to be the most enticing incentive for customers to shop for groceries online, and coupons were the second-strongest incentive. This finding points to a conundrum for smaller stores – they have significantly less resources at their disposal than Amazon and Walmart, which owned 12.5 and 11.1 percent, respectively, of the online grocery market in 2017. Without a comparable profit margin as those two giants, it’s harder for small stores to offer the same deals.

Although customers expressed some hesitation, the ubiquity of online shopping today is undeniable. Internet retail has changed the consumer journey forever, yet grocery shopping has always relied on some in-store evaluation. A table bought online will, theoretically, yield the same result as a table bought in a brick-and-mortar store. A tomato bought online, however, could vary greatly from one bought in a brick and mortar store. In a store, a consumer can pick up the tomato in the produce section, examine it for spots and check its ripeness. Move that process online, and the customer is leaving produce selection up to workers filling one in a long list of orders.

Moving forward, independent retailers will need to build loyalty to retain existing customers and find a way to lure new customers away from the low prices of the grocery giants. Mahon suggested that online reviews and customer advocacy could boost small stores’ online sales.

Mahon’s study examined Marsh’s Sun Fresh grocery store in Kansas City. Mahon sent surveys via email to the store’s marketing list, then she ran a quantitative analysis on the responses to draw her conclusions. The majority of her respondents were between the ages of 50 and 69.

Key takeaways
  • Consumers are constantly looking for convenient ways to make their purchases.
  • Consistency of produce quality is a barrier to consumers thinking of engaging in online grocery shopping.
  • Free delivery is the most compelling factor for consumers exploring online grocery shopping.

Tags:, , , ,

Leave a Reply

Have you heard?

Missouri Business Alert is participating in CoMoGives2019!

Find out how we plan to use your gift to enhance training and programming for our students