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Grocery eCommerce Must Account for Every Demographic

When grocery e-commerce made its first appearance in the early 2000s, consumers were understandably skeptical. They raised eyebrows at the feasibility of door-to-door delivery services handling perishable items and shuddered at the prices that online grocers were expecting them to pay for an often limited selection. Although its first impression wasn’t the greatest, grocery e-commerce is giving it another shot in 2014 as companies are finally realizing ways to turn profits while keeping prices low for consumers and ensuring consistent, timely delivery of their items. Unsurprisingly, this has created a surge of competition in the past couple of years as startups duke it out with industry giants for supremacy in the online grocery market.

While the initial fervor of the race to master grocery e-commerce is only just picking up speed, the buzz will eventually recede as the dominant retailers settle into their niches and build consistent customer bases. Perhaps the most essential insight for retailers to remember as they look to target a particular demographic is the importance of setting a precedent early on. Retail intelligence will allow businesses to track trends in their customer habits and purchasing patterns, but analysts must look further into the data to discover the more nuanced aspects of the people that comprise their audiences. Incorporating multi-channel marketing is also a great way for business leaders to reach out to the individuals who they think will get the most out of what they have to offer.

Tracking target markets

The online grocery shopping market is expanding slowly but steadily, and companies will have to lock down their preferred audiences sooner than later if they want to rise to the top of the competition. Multi-channel marketing will be a key asset in this endeavor, but it is ultimately up to business leaders to determine targeted demographics as a launching point for the years to come. Between customer feedback and honest self-evaluation, companies must take any advantage they can find in optimizing their business models to best fit the requirements of their desired consumer base and be able to clearly articulate their mission to attract early adopters. It is these customers who will steer the direction of the industry down the road and they need to be reached out to as soon as possible.

An article from International Business Times recently highlighted the sense of urgency that grocery retailers are feeling as the online shopping market expands. It will become increasingly important for companies to stake out their territory as the years pass and more customers make their way to the Web to shop for food. But just how quickly is the grocery e-commerce market growing exactly? The news source pointed to a report from the retail consultancy firm Brick Meets Click which predicted that by 2023, online shopping will account for 11 percent of all United States grocery spending compared to the 3.3 percent reported in 2013. While consumers will likely not be abandoning the in-store experience any time soon, retailers will need to account for this jump in online activity and plan accordingly.

Group preferences will vary

As in any commercial enterprise, companies must carve out the portion of the market they wish to reach before making any further moves. This is especially true for online grocers as many consumers remain skeptical to the idea and need to be convinced otherwise with marketing efforts that explicitly appeal to their needs, even if they only represent a small portion of the market. Planting the seed of loyalty early on will pay off down the line when a company solidifies its reputation in the online grocery market as a reliable and affordable service for food delivery.

Some of these groups overlap and have similar yet distinct requirements. International Business News explained that wealthy individuals and millennials account for one-fifth of all grocery shoppers in the U.S. and are also the consumers most likely to shop online, making them a highly desirable target for companies looking for their ideal demographic. There is a lot of money to be made in the luxury food delivery corner of the market as high earners are willing to spend more to get the natural and organic foods they want while saving time. Of course, the luxury food market is a difficult one to breach, making the challenge that much more steep. Millennials, on the other hand, may not have as much disposable income but are tech savvy and will expect quality, efficient service nonetheless.

A big talking point that will determine brand potential is the price difference between delivery and in-store shopping for the same items. International Business Times spoke with Brick Meets Click principal Bill Bishop to discuss where consumers will typically cut themselves off when paying extra for delivery, suggesting that anything over a ten percent price difference will keep people in stores.

Articles and resources by the Mercatus team to help guide you on your eCommerce journey.

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