Other parts of this series:
I’m beginning to think that online retail is now where online banking was 20 years ago in the late ‘90s and early 2000s.
As this new thing called “The Internet” started taking hold and more and more people had dial-up access to the internet at home, and something slightly more sophisticated at work, banks developed their own websites.
And as they did so, they began to realise that when people spoke about “banking” they were no longer talking about standing in a queue in a branch at 10am on a Saturday. They were talking about going to the website.
In a sense, the bank was becoming the website. Or the website was becoming the bank. I don’t know which way around makes more sense.
After a year of hard lockdowns, I think the retailers could benefit from the same insight.
The grocery store is not the grocery store. It’s the website.
Amazon showed us the way when they started by selling books. They cut their teeth on selling relatively high-priced, non-perishable items. Books and consumer electronics were early successes because they are small enough to ship at a low cost, and expensive enough to make decent money on.
We’ll skip over the part where Amazon dematerialized books completely, and focus on the fact that it took Amazon 20 years to get into the grocery business. Groceries are the opposite of consumer electronics and books. They’re low-priced items that require much larger trucks and complicated cold chain logistics.
I spoke last time about how the experience of grocery shopping online is broken. Online shopping seems much more geared to high-ticket items.
What if FMCG retailers realized the opportunity in front of them: their website is their shop. Instead of going to a mall on a Saturday morning to pick groceries, put them in a hot car boot for 30 – 90 minutes and then unpack them on the other side, I think customers would much rather have groceries magically appear in their fridges and cupboards with no effort on their part.
We’re beginning to see the first steps towards this future. Since 2019, we’ve been looking at digital merchandising and virtual walk-throughs for online retailing. Customers interact with their grocery store like they would in a videogame world.
They can click on the virtual shelf to add an item to their cart. They can click on the item itself to see nutrition information or compare prices or even go to the manufacturer’s website.
Suddenly, grocery shopping online is actually better than doing it offline. The cumbersome “add to cart” radio boxes go away, moving through the store is natural and easy. You’re in a video game, so you can fly above the shelves if you want to find something quickly.
When we look back at online grocery retailing in the 2010s, we will be shocked that it was so primitive for so long. I think if FMCG retailers embrace a completely new way of shopping, they will see that their website can indeed be their business, just like banks do now.
Of course, that will raise the question of what we do with the physical locations that will slowly attract fewer and fewer feet. What, if anything, would be the purpose of a physical grocery store? But that, I think, is a subject for another post.
To read more about digital merchandising and virtual walk-throughs, click here. I think you’ll be amazed nobody thought of it sooner.