Future growth of e-grocery to be led by small, smart cities

Priyanka, a Bengaluru-based software professional, prefers buying all her household stuff online since it not only saves her time but she also spends less owing to discounts and offers.
Delhi-based homemaker Shikha purchases all daily needs using a mobile app which makes buying grocery convenient and fun. The daily grocery she orders is delivered within the required time with some discounts for her next purchase.
These are not the only examples, online shopping has made life so simple and hassle-free that consumers are gradually increasing their dependency on these platforms. This change in buying behaviour has resulted as a blessing for e-tailers, but is it so easy to retain customers in an online medium, where every second day there is a new food & grocery marketplace popping-up with plenty of offers and discounts, and of course assortments galore.
There has been a paradigm shift in consumer shopping patterns, but in the rat race of grabbing a loyal customer base how are retailers observing this change and consumer inclination towards the Omnichannel medium of purchasing?
As per an industry report by Ken Research, the Indian online grocery market is all set to hit Rs 2.7 billion mark by FY’2019 following the surge in number of players operating in the industry. Besides, the report claims that the future growth of online grocery industry is expected to be led by operations in small and smart cities and saturation in metropolitan cities.
Sculpting Consumer Behaviour in the Omnichannel Era
Online shopping has changed the retail landscape in a big way by integrating the entire ecosystem by making everything ‘customer centric’. Moreover, with the help of technology and big data retailers find it as an easy catch to grab the consumers attention.
Co-Founder & CEO of BigBasket.com, Hari Menon says: “Buying grocery tends to be a monthly chore and is nowhere close to how people experience shopping for fashion. For instance in terms of a brick-and-mortar retail store, the customer remembers the layout of the physical retail store as it helps them to pick up what they need very quickly. Similarly, we have an online list that captures what the shopper buys and we call it ‘smart basket’. The smart basket categorises what a customer buys frequently and throws those items to the customer, the moment she is online. So, the customer can quickly add those products to their list. This is one of the reasons why customers stick to one particular e-commerce portal for shopping as it can be cumbersome to buy a regular list of goods from different sites.”
E-retail has shaped consumer shopping patterns by alluring them with attractive discounts, good quality assortments and ease of shopping; and all these factors have made it difficult for the traditional kiranas / retailers to sustain in the competition.
“Physical retailers will eventually go online. We are online players and we do not have physical stores. If you think that you have inventory in the physical stores and you can just capitalise on that to deliver online, then it will not work. This is because stores are designed with inventory that are meant for that particular catchment and they will fail to get new customers. One also has to learn about the last mile of business, and it has to be set up as a separate base,” says Menon.
The advancement and ease of operations introduced with the advent of online commerce has been remarkable. And this has resulted in a paradigm shift that has pushed traditional retailers to go online and operate in an integrated and organised way.
Head Omnichannel Jasper Infotech/ Snapdeal, Badal Malick says, “I think keeping a track of the customers pulse is critical. Customer expectations change with the adoption of technology, and retailers will need to adapt accordingly. Also, staying abreast with innovation ecosystems and partnering with leading edge startups is the key. Being a disruptor rather than being disrupted is the recipe for sustainable growth and relevance.”
No wonder then that the journey of retailers and e-tailers is driven by consumers and shopping patterns. But in the years to come retailers have to work hard to sustain amidst the cut-throat competition and innovation.
“Customer expectations and behaviours are changing. Shoppers are more empowered, informed, collaborative, and extracting. They are also more service-conscious, and see value beyond just price discounts and promotions. These trends are being accelerated by what has been called SoLoMoMe – social, mobile, hyper-local, and personalisation. In the near future, I feel Indian shopping will become an intensely personalised experience, powered by data-driven insights and mobile. Digital and physical touch points will merge into an integrated journey with higher levels of service,” says Malick.
The Way Ahead
Despite all the buzz around online grocery retail, traditional food & grocery stores will continue to be an integral part of the market. At the same time with growth of technology and Internet penetration the market share of online groceries will continue to increase at a higher growth rate. Besides, the industry will also witness new players and better business models.