The COVID-19 pandemic has put tremendous pressure on online grocery channels. Shoppers are panic buying pantry items, including sweets and snacks, and brands are struggling to keep up with high demands, resulting in unprecedented out-of-stock levels across many popular categories.
Business models such as click and collect and grocery delivery are soaring, as consumers feel they are the safer options during this time. For example, Target Corp. reported a mid-teens decline in retail sales while simultaneously experiencing 275 percent growth in digital channels. This means it is time, now more than ever, for brands to get serious about their performance in the channel.
What Is Click & Collect?
Click and collect, also sometimes called “buy online, pickup in store” (BOPIS), allows retailers to offer consumers the option to place orders online and pick them up in person at a retail location or collection point. The goal is to offer the convenience of online shopping with the instant gratification of traditional brick and mortar, all in a business model with more sustainable economics than full-service doorstep delivery.
Prior to COVID-19, click and collect was expected to be adopted by more than 90 percent of retailers and 141 million shoppers by 2021, but this has been accelerated due to this global event. In fact, a major provider of grocery delivery and click and collect services for retailers, Maplebear Inc.’s Instacart, has experienced a growth rate of more than 10x and a dramatic increase in subscribers in the past few weeks alone.
Why Should Brands Turn To Click & Collect Right Now?
Consumers are more open-minded to alternative solutions than before, often willing to try new services to replace a trip to the grocery store during this time of uncertainty. Therefore, the demand for click and collect is there. However, click and collect is also beneficial for several other reasons, with convenience and cost structure being two key factors.
For consumers, click and collect lets shoppers save time in comparison to a traditional fully self-service store trip without having to pay additional convenience fees commonly associated with delivery.
For retailers, there are cost savings from leveraging the existing asset base and inventory and keeping last-mile logistics the responsibility of shoppers themselves.
How Candy & Snack Brands Can Win
To make the most of click and collect and online grocery growth, brands must adapt their approaches to distribution, marketing, merchandising and supply chain decisions.
1. Start With On-Shelf Availability
With click and collect, ensuring on-shelf availability is crucial. Just as with in-store, you can’t win if you aren’t in stock and on shelf — even if it is a virtual shelf. As store-level inventory begins to serve demand from both in-store and online shoppers, you might need to re-tool collaborative planning, forecasting and replenishment approaches. Near real-time alerting that notifies commercial teams when a point of distribution needs replenishment can be one way to execute this basic requirement.
2. Optimize Visibility At The Digital Shelf
Since the coronavirus outbreak has introduced many new consumers to the world of online shopping, making sure your products appear near the top of category listings and search results is fundamental.
Additionally, search placement is especially key in online grocery, since a large percentage of orders begin with a “favorites” list or items added based on past purchases. If your products aren’t highly visible, you’ll never prompt that first sale, which is critical to future sales.
Only a handful of click and collect grocery retailers currently offer the ability to sponsor search results (e.g., Walmart Inc., Target, The Kroger Co., and Amazon.com, Inc.), so it is even more critical to work with retailers to develop user-friendly pathways to your categories and brands and learn to influence the search algorithms that determine which products shoppers see when they search for your brand or related keywords.
3. Nail Your Digital Packaging & Merchandising
In physical stores, packaging and displays can help products stand out against competitors. In a digital retail environment, product content is your packaging. Make sure images, product titles, feature bullets and descriptions are complete and compelling. If a retail partner’s site can accommodate richer media or more detail, don’t limit yourself to what a physical package can communicate — part of the magic of digital retailing is the bigger canvas to work with.
This is especially important now, when smaller brands are able to reach a wider audience due to larger brands running out of stock.
4. Implement Temporary Supply Policies
During forecasted times of high demand, retailers and brands must work together to manage short supply scenarios, like late or insufficient quantities of best-selling items. Instituting policies for allocating limited stock and putting order maximums in place could help keep panic buying at bay. In the U.S., many retailers are limiting purchases of virus-related products, both in-store and online.
While snack and candy brands care deeply about prompting purchases in this channel, the reality is that retailers do as well — and they can and will benefit from their suppliers’ support and guidance. Look for ways to collaborate on efforts to improve customers’ experiences and the bottom line that transcends your brand or category. C&ST
Contributor Info: Keith Anderson is senior vice-president of strategy and insight at Profitero, Inc., where he helps global companies grow their ecommerce presence and sales. He leads the continuous innovation of Profitero’s online solutions, helping global retailers and brands gain a deeper understanding of their online presence to optimize both online and in-store sales. Anderson can be reached at [email protected]