business news in context, analysis with attitude

by Kate McMahon

Yesterday in this space, Michael Sansolo offered some bad news for retailers who probably figured that Amazon’s rapid expansion in the food retail space gives them more enough to worry about. It ends up that there are a lot more issues that challenge their continued existence.

But I’m here this morning with some good news.

New research about the American consumer’s concerns over the safety of products, especially food, purchased online also points to opportunities for bricks-and-mortar supermarkets.

Market intelligence agency Mintel found that some 53 percent of U.S. consumers are concerned about online product safety, a number which surprised me given that national e-commerce sales jumped 16 percent to a whopping $435 billion in 2017.

I was less surprised when the study drilled down on food - almost eight in 10 expressed worry about the freshness of food products they purchase online, according to Mintel, and only 10 percent of Americans say they buy fresh produce, meat, poultry and/or fish through the internet.

That’s what I’d call an opportunity.

To be honest, you can count me with the 90 percent skeptical about buying fresh food online. Whether it is a basic boneless chicken breast or a Granny Smith apple, I want to get a very close look at what I am putting in my cart.

Would I buy corn flakes online? Sure. Fresh corn? Not a chance. I want the experience of choosing each ear, even peering behind the husk and silk to check the size and color of the kernels. (And trust me, my years of experience come in handy when the “just-picked local corn” arrives at Stew Leonard’s on a summer Saturday.)

But, I also no longer fit the demographic of the group most likely (52 percent) to purchase food and drinks online to avoid the store and save time – mothers with children under 18 at home.

So, there’s an opportunity for bricks-and-mortar retailers, but it seems logical to suggest that it will be a diminishing opportunity over time, because it is likely that the number of people willing to buy fresh foods online only is going to grow. Retailers, it seems to me, have to focus on effective communication with their customers, highlight new and exclusive products, and yes, even define for themselves a quality digital and mobile strategy.

The Mintel Online Product Discovery report found that consumers want to learn about new food and drink products from websites that they are familiar with, such as their local grocer, “in their off-line lives.” That especially applies to older consumers, who are nearly twice as likely to learn about new products on grocery retailer sites as they are on Amazon.

It also is well documented that shoppers like to see, touch or taste something before they buy, which has led us to showrooming vs. webrooming. Showrooming is when a consumer visits a store to review a product (i.e. a TV at Best Buy) then orders it online from home. Webrooming is the opposite – the consumer researches online before going into a store for a final evaluation and purchase – and this applies to more than just electronics.

To capitalize on both consumer desires and trends, grocery retailers need to ensure their websites provide a quality digital and mobile shopping experience, including updated product information and specials to entice consumers to shop in the store and/or online, the report found.

But, as I said before, the good news about the potential opportunity for retailers has to be tempered by reality - the opportunity will not exist forever. Not even, it seems, for people like me who are in the skeptical 90 percent.

In conversation yesterday with the Content Guy, I emphatically declared that I would never order meat, fish or produce online, and that I intended to say so in my column. But he challenged me on this: “What if you needed chicken or baby spinach for a meal and could order the known Whole Foods 365 brand from your local store, and have it delivered within a couple of hours using your Prime subscription?”

Point taken. I might try it.

Never say never.

Except for fresh corn. I will never yield on that.

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