Is Online Best For Fresh?
01 January 2017
At the beginning of the year we wrote about the increasingly popular trend of online grocery shopping, making this area now a key consideration for all fresh produce suppliers. Nearly a year later, there has been no slowing of this market and it becomes more important than ever for suppliers to consider what this means when it comes to branding their produce, maintaining quality and tackling the challenges of the supply chain.
The fresh produce industry is still watching the growth of online retailers like Amazon Fresh who are supplying groceries direct to consumers. Amazon's purchase of Whole Foods placed them further into the grocery category, meaning competitors will need to constantly reassess the market to keep up.
A great example of their potential influence was an innovative idea that attempts to merge the online grocery shopping experience with the in-store experience, widening the potential for consumers to use the ease of online shopping with the perk of selecting their own items. In 2017 Amazon started testing its new Amazon Go stores in America. Conceived as an idea as early as 2012, these new stores have the potential to change the grocery market yet again. In an Amazon Go store consumers enter by scanning the Amazon Go App on the way in, they then take what items they need from the shelf and the items are automatically added and removed from a virtual cart. Using 'Just Walk Out Technology' Amazon are harnessing the technology used in self-driving cars to give consumers a shopping experience like no other. When consumers leave with "No lines, no queuing, no checkouts", their shopping is then added up from their virtual cart and charged to their Amazon account as they leave through the doors. The receipt is sent straight to the app. Initiatives like this have the potential to completely change the way people do their shopping and could see the pendulum swing back towards a need for physical stores, married with new online technology.
Obviously there are also new problems created for fresh produce suppliers who don't currently have packaging or barcodes on their produce for this technology to access. Relying on stores to provide this information through scales and barcode printers may make them a less favourable option for being stocked, and with the plastic debate still raging, fresh produce could find itself stuck between a rock and a hard place when trying to get this right.
In the UK, online grocery shopping is reported to be one of the fastest growing purchase channels, both in terms of value and growth, according to retail analysts IGD:
"The average value of weekly online sales in predominantly food stores has more than doubled between 2010 and 2016."
These changing supply chains will continue to provide challenges for retailers and suppliers. Ensuring produce is kept at the right temperature during transport, avoiding stock buildup in the supply chain and preventing bruising of sensitive products (e.g. when jars are put on top of fruit) will all be obstacles to be overcome. However, these situations also create opportunities for new, sustainable, packaging options and avenues for brand exposure. As some of the largest items bought are fresh produce, i.e. bananas, they will play a leading role when packaging and transport options are assessed.
The positive outcomes will include fresh produce suppliers having the opportunity to brand themselves and create loyalty among customers, and in return also receive more in-depth data and analytics on the consumers buying their products.
Whatever people's opinion on this subject the trend is still clear; more and more sales of fresh produce are moving online. Retailers and suppliers need to prepare for this and that includes looking at maintaining quality regardless of the method used to reach the consumer.
Questions such as 'What is the best way to package and transport fragile fruit and vegetables?' and 'How can you maintain quality when transporting to a retailer, and then moving it again to the consumer?' will be key areas to consider.
Quality is important for repeat sales and this isn't less of a priority just because it arrives at a consumer's door rather than being chosen by hand.
When looking at why consumers prefer to shop online, the Retail Feedback Group's (RFG) 2018 U.S. Online Grocery Shopper Study (quoted by freshplaza.com) said:
"It's no surprise that online grocery shoppers find their experience more efficient and convenient. But the fact that online shoppers find the experience both more enjoyable and more pleasantly surprising than an in-store visit should be a wake-up call for all brick-and-mortar retailers."
At Innovative Fresh we monitor fresh produce every week, testing for quality in our specialist labs. With many years of experience we can help producers and sellers finetune their programmes, to give the consumer the best possible eating experience; whether bought direct or online.
If you want help providing the best quality produce for your consumers, get in touch with us at firstname.lastname@example.org.