Opinion: shop, click, cook…will online be the new green grocer?
By Dawn Gray Global Consulting founder and president Dawn E Gray
Increasingly consumers are comfortable shopping online with Nielsen reporting that purchases in food and beverage categories have increased 44% in the past two years. How might that translate to fresh fruits and veggies?
Currently being a resident of the Pacific Northwest, I suggest that we take a look at Amazon Fresh, which goes all the way back to September 2007 when they announced an online grocery service offering fresh and packaged produce in the Seattle, Washington area. Fast forward (okay, maybe not that fast) to February 2012 and that has expanded to 78 zip codes in and around the Seattle area with a reported 8,000 deliveries per week.
An iTunes app for Amazon Fresh was launched in May of 2012. There was lots of speculation around “where to next” with a Bloomberg Business Week article on Sep. 20 musing that California looks to be in Amazon Fresh’s future.
All very interesting but what could this mean for producers and how they might connect with consumers? Now, to be sure I am a biased consumer. I lived and worked in Seattle during the HomeGrocer.com days. Working “global trading hours” and living in a fourth floor walk-up with no elevator, I was an enthusiastic supporter of the site. I have vivid and positive memories of pleasant young men and women hauling up my groceries and delivering with a smile. They seemed genuinely enthusiastic to be part of this new and exciting venture.
Seems that they may have been ahead of their time and consumer connectivity. Today, connected devices have become a way of life with 79% of the North American population online.
Should conventional retail be concerned about Amazon Fresh? Time will tell, however I think there are some real interesting opportunities for growers/producers and consumers. Let’s do a quick review on what we understand about consumer shopping behavior.
We know that it is much more commonplace today for consumers to shop in multiple channels.
We know that consumers, even cash-strapped, are increasingly linking health and wellness to the food they buy for themselves and their families.
We know that the concept of “farm to fork” continues to resonate with consumers. With food safety continuing to be in the news, consumers have a heightened interest in understanding who is growing their food. The growth numbers in organic and fair trade produce underlie this willingness of consumers to put a value on the “who and how” in the production of their fruit and veggies.
And we know that sometime too much choice can be overwhelming for consumers. Consumer surveys consistently report a desire to quickly access information on nutrition, seasonal info, and how to store and prepare fruits and veggies.
As a marketer of fresh produce I had the opportunity to meet with the Amazon Fresh team. As I left that initial meeting I had a déjà vu moment moment – it felt very much like my first meetings with Costco. Back then there was some skepticism in the industry about consumers’ willingness to purchase fresh produce in a warehouse environment with little to no refrigeration. Well, on the producer side we know how that turned out.
Sellers today are most eager to have Costco on their VIP customer list. Amazon Fresh’s proposition has the same feel to me. They have rabidly loyal consumers, have built consumer trust into their brand, and are experts at mining what is referred to as “big data”.
They can have a “conversation” with their consumer that is challenging to replicate in a conventional produce department; what’s new, what’s fresh this week, instant recipes suggestions to increase trial and consumption. Whilst fresh produce continues to drive retail differentiation and margins it is increasingly rare to find that passionate produce pro on the retail floor.
It makes me think of the universal passion of growers and how difficult it can be for them to connect to the consumer. My sense is there is a real opportunity here for “Gary the grower” to communicate with consumers via an online grocery platform. I can imagine a positive impact on consumption if growers can share their fervor for growing healthy food. The opportunity for meaningful collaboration between producers, sellers and consumers is breathtaking.
As a producer if I can predict an increase in my production could I target my limited marketing budget to get my story out to targeted consumers online? This might include digital deals, recipe information and information on growing practices, how to select and store. That just feels more proactive than dropping the price and hoping that movement will improve. With continuing conversations around “local vs. locale” I see great opportunities to engage with the consumer online.
Think about having your very own food forager who can investigate and offer the best and brightest foodie offerings. Yum!
Savvy conventional retailers are paying attention and will need to develop a deeper connection with their shoppers, embrace the digital world, accept multi-channel shopping as the new normal and innovate like never before.
Will online grocery shopping expand beyond its current limited offerings in North America? Time indeed will tell. Have some fun and check it out here.
And a personal plea to the folks in Seattle, do please take a glance to the north of you. Vancouver is a cosmopolitan, ethnically diverse world-class city with lots of adventurous foodies who just might embrace your offerings.