Digital grocery in the US has long trailed developments in Europe and Asia. However, Amazon has been quick to reset consumer expectations with a high bar for online product discoverability and fulfillment in the US, forcing grocers to quickly advance their digital sophistication or risk defeat.
L2’s Digital IQ Index: Grocery highlights several key trends:
Physical is going digital. Grocers have spent decades perfecting in-store merchandising. However, few translate these efforts to digital. Only 55% of grocers in L2’s study offer nutrition facts on product pages, while just 50% cross-sell on product pages and barely 27% display sponsored products on grid pages, the digital equivalent of physical end-cap displays.
Private label is a priority. Leading grocers often boost private label brands and bury competitors to drive gross margin. Target’s private labels accounted for 11% of listings surfaced by 1,975 food-related queries on Target.com, while Walmart’s private labels accounted for 5% of analyzed results on Walmart.com.
Instacart is driving e-commerce. Grocers see Instacart as an ally against Amazon; the company now works with 58% of grocers in L2’s study that have brick-and-mortar locations. More than half of those retailers host the experience under a separate branded subdomain (e.g. delivery.albertsons.com). However, even so, grocers should consider whether they are putting the loyalty of their customers at risk in exchange for offering e-commerce more quickly.