How can grocers keep pace with omnichannel?
The delivery of an omnichannel customer service and experience has never been more important. In a press conference last week, M&S revealed its annual profits have fallen by a surprising 64% – with the retailer attributing the fall to its recent restructuring programme. But despite this, it wasn’t the dive in profits that dominated discussion, it was the customer; the retailer’s booming food division and upcoming online grocery service, possibly in partnership with Ocado.
The rise of online shopping has meant that customers have been able to buy groceries from the comfort of their own homes, and choose convenient delivery slots that suit their day-to-day routines, for some time now. In the past, M&S firmly resisted the service, putting it down to the fact that it’s not the place families go for a large, weekly shop. But as an increasing number of consumers exhibit a preference to shop online, last month M&S finally jumped on the bandwagon with plans to launch an online grocery shopping trial in Autumn.
It’s clear that all retailers, including supermarkets, need to continue to listen and adapt to the changing omnichannel demands of modern consumers in bid to remain current and capitalise. Although they got off to a flying start, supermarkets now have to think on their feet if they are to maintain their lead, and keep up with omnichannel innovations and offerings of other retailers.
Off to a flying start
Contrary to popular belief, UK supermarkets have actually been quicker to react to customer demand and the move to online than other retailers. The likes of Tesco, Sainsbury’s and Asda have been providing an online service for 10-15 years, and online grocery shopping became popular from the moment of its introduction. Consumers have embraced the ease and streamlined efficiency of supermarkets’ online customer service. Our Unfaithful Consumer Report found that 55% of UK consumers rate convenience as most important when shopping.
Meanwhile, although very few fashion retailers offer a choice of hourly delivery slots throughout the day, this has long been the norm for supermarkets across the country. In fact, just this week Tesco made further progress and announced plans to take on Amazon with its one hour delivery service, that will deliver customers’ shopping within an hour of an order being placed.
Part of this ease of offering could be because supermarkets haven’t suffered from the last-mile delivery costs involved with online orders in the same way other retailers have. Supermarkets have their own distributors and don’t have to rely on external couriers such as Hermes and DPD. Delivering fresh to customers is actually similar to delivering to stores, and this could be why Amazon Fresh has failed to get a stronghold in the market like competitors.
Merging online with offline
Supermarkets were among the first to implement the click and collect model; one of the first initiatives that attempted to merge both the online and offline. It’s easy to see why the model has been such an important aspect of customer service for supermarkets throughout the years. Due to squeezed margins and discount competitors like Aldi and Lidl, it’s been a challenging time for supermarkets to remain profitable. Although many people prefer to avoid the bombardment of in-store offers, the physical shop can still be a valuable part of the customer experience and the merger of both is key.
At Sainsbury’s digital click-and-collect desks, customers can pick up Argos and eBay orders as well as DPD parcel deliveries, meanwhile Co-op food has a longstanding partnership with Amazon, offering in-store Amazon Lockers. The click-and-collect model caters to the omnichannel needs of consumers but encourages further spending in-store by bringing the customer in-store, to boost revenue.
It’s time to up the game
Whilst click-and-collect is an established model for supermarkets, there’s still room for omnichannel experimentation in customer service across other platforms, such as mobile for supermarkets. In a landscape where customers are less brand-loyal, more willing to switch than ever, and there’s little difference between supermarkets’ online offerings, it’s a way to stand out. Having a website is no longer enough.
Leading the way in mobile experimentation are Tesco, which has always looked to differentiate itself from competitors with its mobile offering. As far back as seven years, Tesco already had a mobile app for wine barcode scanning. Today, however, it’s turning to customer incentivisation to optimise omni-channel with a different mobile platform. Despite mixed reviews and uptake, its PayQwiq app can now be used at every UK store. The app lets customers pay instore using their phone and register Clubcard points automatically, incentivising them to do so with up to 500 extra points when they first sign up.
But whilst supermarkets explore mobile, there is also opportunity to improve omnichannel customer service by looking back to the shop floor, and soon will come a time where a complete reassessment is necessary. To keep customers off their phones, and in the physical store, change is vital. After all, successful retailers will only survive if they make sure their shopping experience is an appealing and exciting one.