General / May 7, 2018
Ecommerce has been thriving for years, but only recently has the grocery industry started seeing a significant shift in dollars as buyers are adding online purchases to their local buying habits—or replacing in-store shopping entirely. Grocery ecommerce is certainly a small segment of online shopping revenue, but big growth in this area is on the horizon. Nielsen and the Food Marketing Institute estimate that within the next 5 or so years, online grocery sales could reach $100 billion, and more than 2/3 of shoppers would make regular online grocery purchases. What does this mean for the packaging industry?
The online shopping option of making a purchase and picking it up at a local store has become a popular option for grocery shoppers. Just as takeout dining can be cheaper than delivery, “click and collect” grocery shopping offers the convenience of having a consumer’s grocery order ready to go, without paying delivery fees. It can also reduce waiting time as a pickup order may be complete before a delivery order can be scheduled. As “click and collect” products are pulled from the same shelves where shoppers traditionally select their purchases, there is no change to the packaging.
More affluent and younger (tech-savvy) buyers are adopting home delivery from local stores. Some stores offer their own solutions, while others participate in aggregated app-based shopping services. Similar to a personal shopper, contracted buyers select items off the shelves and either deliver them themselves or hand the order over to delivery personnel. As with “click and collect” shopping, the packaging remains unchanged from what is available in local retail stores.
Grocery delivery via parcel is the growing domain of retail giants like Amazon and Walmart. Those who have been slow to adopt online grocery shopping of any type are usually concerned that pickers won’t be as selective about meat and produce. Some have dipped their toes in the water and accepted the risk with local pickup or delivery, but Amazon, Walmart, and other large retailers have had to build trust with non-perishables in order to convert buyers into regular grocery shoppers across the full line of available products. But the payoff for these retailers is the opportunity to make the most of specialized packaging that promotes their products and meets the needs of consumers.
It’s tough to change out packaging for local pickup or delivery products, though as the market segment grows, there may be inroads available here if demand justifies stocking products with packaging variations (in-store and pickup/delivery versions). Where opportunity already shines is in shipment-based grocery sales. Large retailers can design custom packaging aimed at improving customer experience and encouraging repeat sales and upsells. Flexible packaging is particularly suited to the task, especially as space savings (both in shipment and in the pantry) and reduced weight spell a better experience and lower shipping costs.
Perishables may continue to be a challenge for online grocery sales, but it is a massive opportunity for creative packaging and shipping companies. As the ability to safely transport perishable food items meets (and drives) demand, online grocery shopping across all food categories is likely to expand. When packaging and shipping companies meet and exceed customer expectations in delivering food in great condition, it’s a win for every part of the supply chain.
Online grocery sales impact more than just the delivery mode for consumers, but also packaging and branding choices for manufacturers. To explore your options in getting ahead of the curve in this new shopping trend, give us a call or contact us.