Retail

Unique Opportunities: The Rise of
e-Groceries 

At this year’s Global Packaged Summit, Tetra Pak launched the 2018 Tetra Pak Index, an annual report that investigates consumer trends and growth opportunities in the Food and Drink industry. Sonia Sharma explores the rise of e-Groceries and the role packaging plays

The power of the internet is transforming grocery, just as it has revolutionised so many other retail sectors. Grocery offers particular challenges, but these are being addressed and overcome, and online continues to grow significantly faster than (and often at the expense of) other channels.


Delivering grocery presents a number of packaging challenges and in the Tetra Pak Index: Online Grocery – which was exclusively launched at Packaged, The 7th Global Summit in Amsterdam on 25th and 26th June – Dennis Jönsson, President & CEO at Tetra Pak Group said: “Physical stores are also being reinvented through digitalisation, providing consumers with extra information on products, personal offers and recommendations, automated cash-free checkout and more - as well as supporting hubs for rapid local delivery. Indeed, offline and online are now merging into an "omnichannel" age, where consumers expect to be able to buy whenever, wherever and however they choose, with the ubiquitous smartphone acting as their compass.


“This year's Tetra Pak Index provides insights to this new omnichannel world of grocery shopping. It's based on consumer research conducted in five countries, plus interviews with e-retailers in the North America, Europe and China, and a global market segmentation study.”

The report highlights four key trends; convenience, technology, sustainability and personalisation.


“Packaging has a key role to play in all of this. It's part and parcel of home delivery, impacting significantly on both customer satisfaction and logistics (light weight and space efficiency are key factors)” Jönsson said. “And while its primary purpose will always be one of protection and preservation, it now offers rich potential for personalisation and a consumer experience that can both surprise and delight. Thanks to smart technology, every package sold can now carry a unique digital identifier, creating the opportunity for direct one-to-one conversations with consumers (as well as helping drive efficiencies across the entire supply chain).”

Online sales: the fastest growing channel

The report states that online portals are the fastest growing channels for groceries with Kantar's latest figures for the global fast-moving consumer goods (FMCG) market as a whole showing that online sales grew 30% in the 12 months to March 2017, double the figure for the previous year, compared with just 1.3% growth in all FMCG channels. "It's about how online and offline together can create both a better customer experience and better efficiency for the entire supply chain," says Stéphane Roger, Global Director of Shopper and Retail at Kantar.


Retail giants such as Walmart have acquired e-commerce companies such as Jet.com and made significant investments in IT to raise its capabilities and meet consumer demand. Meanwhile, Amazon spent $13.7bn to buy Whole Foods, not only to establish a physical consumer-facing presence, but also to turn its stores into a network of hubs close to urban consumers. The company is now rolling out free two-hour delivery from the grocery chain to Prime subscribers in various US cities, increasing pressure on traditional retailers to look for ways to promptly and profitably deliver their own fresh food and pantry items.


John Carroll, Vice President and General Manager E-commerce at The Coca-Cola Company said: "This is, without a doubt, the greatest retail revolution we've seen over the last 50 years. The brick-and-mortar world and the online world are merging. And it's all being driven by how and where people are shopping.”

Path-to-purchase: redefining the consumer experience

The way consumers receive, experience and react to products is creating a new circular model as there are more ways to buy and more places to get information from than ever before. The report says: “Given the amount of information consumers are exposed to online, brands need to work harder than ever to capture attention and get their message across. Arresting and, crucially, simple messaging is vital, particularly as mobile is increasingly the device of choice. Hence Facebook now talks about "the three-second audition" and "thumb-stopping content."


Online shopping drastically reduces the visual real estate for products, especially on mobile. So it's important to ensure that items are instantly recognisable, as well as having clear copy, especially in categories such as baby food where nutrition and ingredient information is paramount.

Harry Walker, Head of Industry - Retail at Google said: "Consumers are increasingly starting their grocery shopping journey without a destination - the starting point is the product."


Google has seen a strong rise in searches for the term "best" in relation to products, even for traditionally low consideration items such as toothbrushes (up 100% in two years), deodorants (up 180%) or olive oils (up 110%). Brands still dominate search terms over generic products today (70% versus 30%) - but growth is overwhelmingly stronger for generics than brands (81% versus 2%).


The packaging of a product is a crucial aspect of the consumer experience. The report states that in a survey of US consumer packaged goods (CPG) companies last year, 95% agreed that "bad" packaging (defined as a package that's hard to open, unattractive, or results in damage including breaks or leaks) can have a negative impact on an online customer experience. Moreover, 71% said it can ruin an otherwise positive online purchase experience. However, 97% agreed that a "good" packaging experience can have a positive impact, with 70% saying packaging can even create a memorable experience. Crucially, 86% say improved e-commerce packaging is the responsibility of the brand, not the e-retailer. Secondary packaging is also a key issue today, while personalisation and custom unboxing experiences tipped as trends for the future.


As communication between the consumer and the brand becomes more instant, connected customers are increasingly sharing opinions and experiences of food and beverage brands online. The report states that 68% of consumers globally (and 90% in China) write reviews at least monthly, with 57% doing so weekly, whilst 72% globally post images/comments on food and beverages monthly - rising to 93% in China, led by commenting on or reviewing a product (68%) and showing something new (60%). Moreover, 49% of CPG users say their e-commerce customers are not only sharing their experiences with online purchases online, they are including photos and commentary about packaging on social media, making packaging, both good and bad, more visible than ever before.

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