In an earlier blog post, we discussed how consumer shopping behaviour is fundamentally shifting towards online and what retailers could do to establish an advantage. Grocers in particular, have the unique opportunity to learn from the ongoing experience and adapt. The significant shift in share of digital channels is relatively new territory for Grocery retailers, who must act urgently if they want to avoid seeing their margins diminish after the crisis.

All other factors being equal, an AlixPartners study suggests that permanent overall online penetration of between 7.5% and 20% would result in an individual grocer’s current operating income being reduced by approximately 75 to 275 basis points if the retailer is unable to charge the customer extra fee for the service.

Retailers need to pay careful consideration to this and get ahead of competition by taking five decisive actions:  

  1. Set up a dedicated task-force to define the future business operating model, 
  2. Test-test-test and learn-learn-learn as much about customers' shifting shopping patterns (especially as many of them are new to this channel) during this period as they can to inform future offer and marketing decisions, 
  3. Rethink promotional investments , 
  4. Deal with the efficiency of ecommerce operations, and
  5. Review physical customer touchpoints.

Grocers are learning precious lessons with each passing day and those that act on those learnings and adapt best will establish an advantage coming out of the crisis.