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Simple Online Order Taking App for Supermarket and Grocery Store Online Orders

Grocery Industry Trends to Watch out in 2021

Article2021

As the corona virus pandemic unfolded across the world, retail industry suffered uncertainty and unparalleled operational challenges. It was characterized by sudden lockdowns, store-capacity restrictions, and endless sanitization protocols being the norm and made a fundamental shift in the way customer’s shopped, as increasingly buyers opted for online shopping or the neighbourhood pickup.

This erratic year portends even more uncertainty for 2021 and beyond, as the pandemic begins to fade. Will customers return to in-store retail en masse, like its 2019 again? Or will many of the shopping habits developed this year linger on into the future?

Significantly, though a few businesses have been affected by the virus but on the flip side it has given an impetus to the grocery industry. Initially, slow to adapt to e-commerce, the grocery industry has pumped in enough funds this year to develop online platforms to sustain consumer demand for home delivery, in-store pickup and new categories of merchandise.

Regardless of a huge drop-off in consumer spending early in 2021, the second half of the year has been a strong one for retail sales, with household spending, leading the charge of an industry-wide V-shaped recovery, according to statistics.

Online grocery is supply driven, and as online grocers provide more supply, customers will adopt the new method of grocery shopping.

Major grocery players, including traditional competitors, e-commerce giants and start-ups with venture-capital funding, are making the kinds of major investments and acquisitions—in customer-value proposition, experience, picking, and delivery—that portends an era of true transformation.

In the process, they have transformed themselves into Omni channel businesses keeping pace with the new consumer habits. Demand for online groceries has skyrocketed. Meanwhile, the local Kirana stores are scrambling to digitize their operations to compete with online retailers from e-commerce giants and other players.

Neighborhood grocers

Just about a year after the COVID-19 pandemic wreaked havoc globally, the neighborhood grocery store probably comes across as heaven sent.

Meanwhile, local grocers struggling under the pandemic’s demands continued to lose ground to larger retailers as they hadn’t begun building the infrastructure, technology, and delivery networks crucial to fulfill online orders.

Smaller stores tried following the lead of larger chains by expanding curbside pickup and delivery, (retailers allow customers to place an online order for pick up at a local store.) but they lacked the technology, financial resources, and sophisticated supply chains of their larger competitors. Forced to be inventive, they scrambled to move more of their business online.

Some had their boys take delivery orders at convenient locations over the phone and call customers back to complete their purchases. Overall, the costs of fulfilling online orders, which are less profitable than buying in stores, hurt independent grocers running on already thin profits.

But the pandemic emphasized the critical role of local grocers, long the industry’s underdog; play in providing access to fresh food and liaising with the community. The changes wrought by COVID-19 presented an opportunity to focus more meticulously on serving their communities and catering to the local customer.

2021’s Grocery Industry Trends

The pandemic has forced significant changes within the grocery industry and has elevated e-commerce to one of the most significant industry trends this year. Online grocery shopping quickly went mainstream, elevating large and small retailers who invested billions of dollars in developing their shipping infrastructure and building fulfillment centers to deliver orders quicker and more efficiently.

But survival in the grocery business this year will mean more than delivering essentials to shopper’s doors. Catering to changes in consumer behavior will be crucial, through both paid loyalty programs and an emphasis on developing attractive private label businesses. Retailers from giant retailers to small-town independent stores will keep reconfiguring their aisles to align with an evolving appetite for goods and comply with safety protocols.

The sharp rise in demand for home delivery has been a clear windfall for colossal online retailers. This has left traditional grocers racing to build out their own delivery channels while trying to tone down the high costs of door-to-door service that has already put so much pressure on the restaurant business.

Retailers with both a physical footprint and an online presence are directing resources into developing a multichannel platform that capitalizes on both. In particular, the BOPIS (buy online pickup in store) model has grocers dedicating more floor space for customers and gig workers from third-party delivery services to fulfill their orders.

Future-Proof Supply Chains

As anyone who has walked down an empty aisle in search of essentials knows, the pandemic’s rapid fallout this year drew attention to the helplessness in grocers’ supply chains. In response, larger retailers have invested billions of dollars in building out their shipping and fulfillment infrastructure.

To compete, smaller retailers are turning to micro-fulfillment centers to consolidate operations, combining the speed of in-store pick-up service with the efficiency of a large, mechanized warehouse. The small footprint of these highly-automated warehouses allows them to be located closer to customers clustered in urban areas for quicker delivery.

Larger retailers, are allocating space within their own stores to open micro-fulfillment hubs that accommodate a range of delivery methods, including click-and-collect, curbside delivery, and same-day home delivery. The demand for dark stores, warehouses used to fulfill online orders, is on the rise among smaller retailers, who can rent space to open micro-fulfillment centers near their customers.

The supply chains of the future will build on this technology to fine-tune inventory supply and consumer demand with flexibility and speed.

Loyalty Plays

Meanwhile, cultivating customer loyalty has become more vital than ever. A report from a noted Business management consultant shows that a considerable number of consumers have tried new brands during the pandemic and that just a miniscule number of shoppers plan to shop during the holiday season from the same retailers and brands they frequented last year.

As the pandemic jolts consumers out of their routines and drives them to try new products and outlets, grocery retailers are working out ways to retain their business and promote repeat purchases. Major to minor retailers are beefing up their paid loyalty programs, hoping to give customers an incentive to stick with them during and after the pandemic.

A humongous store’s new program is designed to compete against another behemoth, which provides benefits from free delivery to on-demand entertainment to more than 100 million members. For a marginal amount annually, the store offers unlimited home deliveries, discounts on fuel, and a scan-and-go shopping feature to make in-store checkout more convenient.

Other grocers are having identical promotions similar to yearly membership program that offers grocery delivery and two-hour express pickup free of charge, as well as other savings and benefits in-store and online.

Conclusion

The pandemic shook up the grocery industry, overhauling retailers of all sizes and reshaping the landscape. As we enter 2021, big-box retailers benefitting from economies of scale and prior investment are emerging as the victors while local grocery chains continue to struggle.

But the plight of the pandemic can lift small grocers, too. Though not as prepared financially or technologically for a pandemic, savvy grocers saw that the smaller scale of their enterprises granted one crucial advantage over big boxes: Local, independent grocers know firsthand what their communities want and need.

The pressures of the COVID-19 outbreak this year have exacerbated ongoing struggles in the grocery industry. But the stores that bet on technology today will be in a stronger position to succeed post-pandemic.

The information provided on this web page is for general informational purposes only and is not a substitute for professional advice. All information is provided in good faith, however we make no representation or warranty of any kind, express or implied regarding the accuracy, validity, reliability, availability or completeness of any information. Accordingly, before taking any actions based upon such information, we encourage you to consult with the appropriate professionals. We do not provide any kind of [medical/legal/fitness/health/other] advice. The use or reliance of any information contained is solely at your own risk.

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