Why supermarket should focus on eCommerce

Why supermarket should focus on eCommerce

eCommerce is only a niche in the food industry, but it has boundless potential. Online customers are also better offline customers: they spend more in stores and are more loyal, something Albert Heijn knows all too well.

 

Online opportunities

Supermarkets have come up with plenty of reasons not to go full throttle when it comes to eCommerce investments: online barely represents 1.5 % of the total food industry turnover and no one earns anything from it. The logistics are too expensive, not enough customers want to pay for it, while shoppers want to see, smell and touch food. As there are stores on every street corner, there is barely any need for web shops. 


That may be true, but it pays to see the bigger picture. The online world is not just some separate or additional sales channel. It can also strengthen sales in physical stores, as it turns out.

 

Synergy between online and offline

Back in 2014, a Kantar Worldpanel study (“Accelerating the growth of e-commerce in FMCG”) pointed to strong synergy between online and offline sales channels. An example: Tesco's offline customers spend 29 % of their annual shopping budget at Tesco, but those who shop at Tesco both online and offline, spend 46 % of their annual shopping budget at the chain. 


That is not merely because of their additional online spending. Their offline spending are also considerably than those of purely offline customers. Kantar Worldpanel concluded similarly for Asda and Sainsbury, proving that who manages to attract online customers, will benefit offline as well without the risk of cannibalization. 


Recent GfK numbers point to a similar trend in the Netherlands, we see in Distrifood: Albert Heijn has managed to boost its customer loyalty thanks to omnichannel shoppers, 6.9 % of their customer base and 15 % of the company's turnover. Albert Heijn's purely online share is already up to 3 %, much higher than the industry's average. Albert Heijn's Dutch growth can be contributed solely to its online performance. 

 

Brand buyers

One can conclude that omnichannel customers are the holy grail for supermarket chains. They spend considerably more, both online and offline, and are more loyal to the chain. These are the customers you want to acquire and keep, not only as a retailer but as a brand as well. Kantar Worldpanel says online buyers are brand buyers and 55 % of online customers use the same shopping list each and every time, for the exact same retailer. It is therefore imperative that you are the first name on that list.


Albert Heijn has apparently figured out how to do that and that particular knowledge will soon cross the border, to Delhaize. Interesting times are coming...