It’s truly no secret that consumers and businesses are becoming more dependent on technology as time goes on. The speed that technology is advancing only pushes us to adapt to these changes, providing us with resources that help us complete tasks more efficiently. We’ve seen these shifts in many different industries as they become more accustomed to automating back of house operations or implementing new systems to oversee employees. Consumers have also been flocking to new technological uses, whether it’s a recently released app or the newest, high-tech device.
This rapid technological movement works hand in hand with the constant changes in consumer preferences. As trends rise and fall, so does consumer interest in certain products and services. Many businesses attempt to retain the interest of customers through different marketing tactics, such as loyalty programs. In this article, we’ll discuss the rise of e-commerce within the food industry, and how technology plays a role in these growing trends for both consumers and businesses.
What sets the food industry apart from other industries is their limited time to market products and goods. The quick flow of products within food retail establishments puts a constraint on the amount of time and space they have to advertise. Because of perishable goods and produce that may have a short shelf life, the pace at which the food industry has to make sales quick. However, with new trends that have caused a shift towards digital disruption, the growth of the food industry has also changed.
The percentage of total food and beverage sales due to e-commerce has been steadily on the rise since 2019. In fact, there was an increase of 2.0% of food and beverage sales due to e-commerce to 2.3% in 2020, and then rising to 2.7% in 2021. This percentage continues to grow, reports predicting for it to rise to 3.5% by 2023. The online grocery market boomed over the course of the pandemic as people flooded to grocery shopping apps to avoid in-person interactions. However, 31% of shoppers will continue to grocery shop via pickup/delivery, even after the pandemic ends.
The online buying industry mainly consists of young, affluent, and urban consumers who need to be able to access products faster. Since they’re also early adopters of new technology, they’re more likely to be e-commerce shoppers. However, what else is driving this growth in food e-commerce?
With constant connectivity, the desire for convenience is rapidly expanding. More consumers are turning towards grocery apps to order their groceries in between meetings or on the go as they’re pressed for time. The perpetual shifts in consumer tastes and preferences have bolstered the demand for online grocery. Along with price and product quality considerations, consumers are regularly adapting their shopping habits to the latest trends and technology.
This type of consumer behavior has also affected the way the food industry has conformed to the constant market changes. Grocery stores have improved their speed and availability of same-day delivery for online grocery orders, which only convinces consumers to turn towards ecommerce more frequently. It eventually turns into a cycle that’s pushing the food industry into a quickly evolving digital future.
The not-so-secret ingredient to the growth of e-commerce in the food world is apps. Pre-existing apps, such as Instacart, which allows people to have their groceries delivered to their doorstep, gained traction when the pandemic hit. In fact, Instacart hit their first profitable month during the pandemic. Now, many grocers are looking to integrate their bricks and clicks. Walmart created a digital-physical space for their shoppers, where shoppers navigate stores, gather product info and check out. With Walmart’s prototype, it allows shoppers to assimilate technology and efficiency into their shopping trip without having to give up a brick and mortar experience completely. They are also given the option to shop only online, which has allowed Walmart to mix together the two channels.
Other grocers are looking to follow in Walmart’s footsteps, trying to incorporate e-commerce into their store. The key when launching these types of apps is to provide consumers with shortcuts and make the interface easy to navigate while also being something they want to swipe and tap in. As businesses in the food industry make apps and technology more accessible to consumers, the demand for e-commerce has jumped significantly.
The direct-to-consumer trend has played a major role in other industries, like fashion and retail, but many of those in the food industry have also come around to start implementing DTC. So, what exactly is direct-to-consumer? The type of marketing strategy is when companies advertise directly from the manufacturer to the intended consumer. There is no intermediary involved in this model. Tactics that businesses will use include sending their customers to their owned channels, such as their websites or email lists.
A direct-to-consumer approach can easily expand your brand reach. With a majority of consumers walking around with a smartphone in their pocket, brands can essentially reach their customers anytime, anywhere. No physical store is needed for advertisements. It also helps a business understand their customer demographic better. DTC creates an open line of communication with your consumers, allowing you to interact with them, as well as understand their wants and needs to better align your products and marketing to them.
This also leads to an increase in consumer engagement. By sending an email after a purchase or an instant response to a customer question or complaint, it creates a positive connection between the brand and the consumer. These types of interactions are at the tips of your fingers, whether you’re an employee or a consumer. Happy customers are repeat customers, and loyal customers are what makes a business successful.
So, it’s no surprise that many in the food industry have begun leveraging a direct-to-consumer model within their business. As more food businesses begin implementing an omni-channel for their brand, they also focus on increasing their sales straight from the customer. By doing so, these businesses will not only grow brand awareness and improve customer experiences, but also provide more stability for their company in the long run.
The role that technology plays in our lives is undeniable; as much as some people may want to revert back to a digital detox, there’s no question that technology will continue to advance and adapt to our needs. Ecommerce is no exception. We’ve witnessed the growth of ecommerce in other industries, whether it was clothing or beauty. From shopping at a brick and mortar store to receiving a package at our doorstep, the world of commerce in general has completely changed.
So, the food industry begins to experience their shift to e-commerce. As consumer habits constantly change and businesses continue to improve on their operations, the cyclical nature of e-commerce will continue to grow.