Category: on-demand grocery delivery

  • Mastering Grocery Pricing Intelligence: A Strategic Approach for Modern Retailers

    Mastering Grocery Pricing Intelligence: A Strategic Approach for Modern Retailers

    When egg prices surged 70% during the 2023 avian flu outbreak, grocery retailers faced a critical dilemma: maintain margins and risk losing customers, or absorb costs and watch profits evaporate. Similarly, rising olive oil and chocolate prices also had domino effects, cascading down from retailers to consumers. In each of these scenarios, those with sophisticated pricing intelligence systems adapted swiftly, finding the sweet spot between competitiveness and profitability. Others weren’t so fortunate.

    This scenario continues to play out daily across thousands of products in the grocery sector. From breakfast cereals to fresh produce to bottled water, retailers must orchestrate pricing across a variety of categories – each with its own competitive dynamics, margin requirements, and price sensitivity patterns.

    The Evolution of Grocery Pricing Intelligence

    Imagine these scenarios in the grocery industry:

    • Milk prices spike during a supply shortage.
    • Your competitor drops egg prices by 20%.
    • Fresh produce costs fluctuate with an unseasonable frost.

    For grocery retailers, these aren’t occasional challenges—they’re Tuesday. Reacting to each pricing crisis as it comes isn’t just exhausting—it’s a recipe for shrinking margins and missed opportunities.

    Think of it this way: If you’re constantly playing defense with your pricing strategy, you’re already two steps behind. Commoditized items like milk and eggs face intense price competition, while seasonal products and fresh produce demand constant attention. Simply matching competitor prices or adjusting for cost changes isn’t enough anymore. What’s needed is a proactive approach that anticipates market shifts before they happen and turns pricing challenges into competitive advantages. This is where price management comes in.

    Price management has transformed from simple competitor checks into a strategic power play that can make or break a retailer’s market position. Weekly manual adjustments have given way to a long-term strategic view, driven by data analytics and market intelligence. Here are the basics of how price management in grocery retail works today.

    Three Pillars of Grocery Price Management

    1. Smart Data Collection: Building Your Foundation

    The journey begins with comprehensive data collection and storage across your entire product ecosystem. This means:

    • Complete Coverage Of All SKUs Across All Stores: Tracking prices for all SKUs across all stores, with particular attention to high-velocity items and volatile categories.
    • Dynamic Monitoring: Tracking prices across different time frequencies as grocery prices are highly volatile for different categories. So daily tracking for volatile items like dairy and produce, and weekly for more stable categories may be needed.
    • Competitive Intelligence: Gathering data not just on prices, but on promotions, pack sizes, and private label alternatives.
    • Infrastructure to Support Large Volumes of Data: Partnering with external data and analytics providers to bridge the gap when retailers struggle with the scale of digital infrastructure these data sets require.

    2. Intelligent Data Refinement: Making Sense of the Numbers

    Raw data alone isn’t enough—it needs context and structure to become actionable intelligence. This is called Data Refinement—the process of establishing meaningful relationships within the data to facilitate the extraction of valuable insights. This refinement stage is closely tied to the data collection strategy, as the quality and depth of the insights derived depend on the accuracy and coverage of the collected data.

    Data refinement includes several key processes:

    Advanced Product Matching

    Picture this: You’re tracking a competitor’s pricing on organic apples. Simple, right? Not quite. Yes, Universal Product Codes (UPCs) and Price Lookup Codes (PLUs) are present in Grocery to standardize product identification across different retailers—unlike the fashion industry’s endless style variations. Still, product matching isn’t as straightforward as scanning barcodes.

    Grocery Pricing Intelligence data faces a challenge when product names, weights, and details differ

    Here’s the catch: many retailer websites don’t display them. Then there’s the private label puzzle—your “Store’s Best” organic apples need to match against competitors’ house brands, each with their own unique UPC. Throw in different sizes (4 Apples vs. 1Kg of Apples), regional product names (fancy naming for plain old arugula), and international brand variations (like the name for Sprite in the USA and China), and you’ve got yourself a complex matching challenge that would make conventional pricing intelligence providers sweat.

    Grocery Pricing Intelligence data faces a challenge when different naming conventions and languages are used in different geographies

    Custom Product Relationships for Consistent Pricing and Competitive Positioning

    Think like a shopper browsing the dairy aisle. You regularly buy your family’s favorite organic yogurt, the 24oz tub. But today, you notice the larger 32oz size is on sale – except the 24oz isn’t. As you stand there, confused, you wonder: Is the sale only for the bigger size? Did I miss a promotion? Should I buy the 32oz even though it’s more than I need?

    For shoppers, this inconsistent pricing across product variations creates a frustrating experience. Establishing clear relationships between related items in your catalog is essential for maintaining consistent pricing and a coherent competitive strategy.

    Grocery Pricing Intelligence data refinement involves Custom Product Relationships for Consistent Pricing and Competitive Positioning

    Start by linking products based on attributes like size, brand, and packaging. That way, when you adjust the price of the 32oz yogurt, the 24oz version automatically updates too – no more scrambling to ensure uniform pricing across your assortment. Similarly, products of the same brand but with flavor variations should be connected to keep pricing consistent.

    Taking this one step further, mapping your competitors’ exact and similar products is crucial for comprehensive competitive intelligence. Distinguishing between premium and private label tiers, national brands, and regional players gives you a holistic view of the landscape. With this understanding, you can hone your pricing strategies to maintain a clear, compelling position across your entire category lineup.

    Consistent pricing, whether across your own product variations or against competitors, provides clarity and accuracy in your overall competitive positioning. By establishing these logical connections, you avoid the customer confusion of seemingly random, inconsistent discounts – and ensure your pricing strategies work in harmony, not disarray.

    The Role of AI and Data Sciences in Data Refinement

    On the surface, linking products based on attributes like size, brand, and packaging seems like a no-brainer. But developing and maintaining the systems to accurately and automatically identify these connections? That’s a whole different animal.

    Think about it – you’re not just dealing with text-based product titles and UPCs. There are images, videos, regional variations, private labels, and a whole host of other data types and industry nuances to account for.

    Luckily, DataWeave is one of the few companies that’s truly cracked the code. Our multimodal AI models are trained to process all those diverse data formats – from granular product specs to zany regional produce names. And it’s not just about technology; we also harness the power of human intelligence.

    See, in the grocery world, category managers are the real decision makers. They know their shelves inside and out and can spot those tricky connections in product matching, especially when they are not UPC-based. That’s why DataWeave built in a Human-in-the-Loop (HITL) process, where their AI systems continuously learn from expert feedback. It’s a feedback loop that allows our customers to pitch in and keep product relationships accurate, reliable, and always adapting to new market realities.

    So while product mapping may seem straightforward on the surface, the reality is it takes some serious horsepower to do it right. Thankfully, DataWeave has both the technical chops and the grocery industry know-how to make it happen. Because when it comes to pricing intelligence, getting those product connections right is half the battle.

    3. Strategic Implementation: Turning Insights into Action

    The true value of pricing intelligence (PI) is realized through its strategic application. Although many view PI as a technical function, its strategic significance is increasing, particularly in the context of recent economic pressures like inflation. Here’s why:

    Tactical vs Strategic Use of Data: From Standard Reporting to Competitive Analysis

    Pricing intelligence has come a long way from the days of simply reacting to daily price changes. These days, it’s not just about firefighting—it’s about driving long-term strategy.

    You can use pricing data to make quick, tactical adjustments, like matching a competitor’s sudden price drop on milk. Or, you can leverage that same data to predict market trends, optimize your product lineup, and shape your overall pricing strategy. Retailers who take that strategic view can get out ahead of the curve, anticipating shifts instead of just chasing them.

    DataWeave supports both of these approaches. Our Standard Reporting tools give pricing managers the nitty-gritty details they need—current practices, historical patterns, and operational KPIs. It’s all the insights you’d expect for making those tactical, day-to-day tweaks.

    In addition, DataWeave offers something more powerful: Competitive analysis. This is where pricing intelligence becomes a true strategic weapon. By providing a high-level view of market positioning, competitor moves, and untapped opportunities, competitive analysis empowers leadership to make proactive, big-picture decisions.

    Armed with this broader perspective, retailers can start taking a more surgical approach. Maybe you need to adjust pricing zones to better meet customer demands. Or rethink your overall strategies to stay ahead of the competition, not just keep pace. It’s the difference between constantly putting out fires and systematically fortifying your entire pricing fortress.

    Beyond Pricing: Comprehensive Data for Broader Insights

    Pricing intelligence is just the tip of the iceberg. When you really start to refine and harness your data, the possibilities for grocery retailers expand far beyond simple price comparisons. Think about it – all that information you’re collecting on products, markets, and consumer behavior? That’s a goldmine waiting to be tapped. Sure, you can use it to keep a pulse on competitor pricing. But why stop there?

    What if you could leverage that data to optimize your product assortment, making sure you’re stocking the right mix to meet customer demands? Or tap into predictive analytics to get a glimpse of future market shifts, so you can get out ahead of the curve? How about using it to streamline your supply chain, identify availability inefficiencies, and get products to shelves faster?

    Sure, pricing intelligence will always be mission-critical. But when you couple it with these other data-driven insights, that’s when grocery retailing gets really interesting. It’s about evolving from a price-matching robot to a true strategic visionary, armed with the intelligence to take your business to new heights.

    Looking Ahead: The Future of Grocery Pricing Intelligence

    The grocery pricing landscape continues to evolve, driven by:

    • Integration of AI and machine learning for predictive pricing
    • Enhanced focus on omnichannel pricing consistency
    • Growing importance of personalization in pricing strategies

    Pricing intelligence isn’t just about having data—it’s about having the right data and knowing how to use it strategically. Success requires a comprehensive approach that combines robust data collection, sophisticated analysis, and strategic implementation.

    By embracing modern pricing intelligence tools and strategies, grocery retailers can navigate market volatility, maintain competitive positioning, and drive sustainable growth. The key lies in building a pricing ecosystem that’s both sophisticated enough to handle complex data and flexible enough to adapt to changing market conditions.

    Ready to transform your pricing strategy? Check out our grocery price tracker to get month-on-month updates on grocery prices in the real world. Contact us to learn how our advanced pricing intelligence solutions can help your business stay ahead in the competitive grocery market.

  • eCommerce in South Africa: Data-Driven approach to getting ahead

    eCommerce in South Africa: Data-Driven approach to getting ahead

    What an exciting month we’ve had at DataWeave! Our team flew down to gorgeous Cape Town, South Africa to attend the 8th edition of #EcomAfrica! After months of Zoom calls and virtual events, it was a refreshing change to see our customers in person and meet some of the movers and shakers in eCommerce and some of the top South African brands. 

    Top eCommerce Companies in South Africa
    Top eCommerce Companies in South Africa

    My last visit to South Africa was before the pandemic. Things have changed since then, & the difference was stark! The eCommerce landscape had a paradigm shift during Covid-19 and grew exponentially. My customers spoke to me about the new opportunities, growth potential as well as challenges that came in because of this boom. For one, eCommerce in South Africa has become more competitive than ever – from online retail to grocery and food delivery to even alcohol delivery! All retail businesses seem to have jumped onto the eCommerce bandwagon.

    A recent Deloitte report found that over 70% of South Africans shop online at least once a month & 2 out of 3 respondents said they plan to increase their frequency of online shopping. 65% said they know what they want, search online & check all stores that stock the product to compare prices. Price is one of the key factors that influence consumer purchase decisions. Other critical factors include delivery fee, delivery time, promotions & discounts & product assortment to name a few. In order to stay ahead in this highly competitive arena, both retailers and brands need to make data-driven decisions about critical KPIs like pricing to stay ahead of the competition.

    Increased Online Shopping & Online Shopping Frequency
    Increased Online Shopping & Online Shopping Frequency

    We’ve been working with customers in South Africa for over 4 years now, even before the pandemic. So on Day 2 of the event – S.Krishnan Thyagarajan “Krish”, President & COO, Dataweave had a chance to share our learnings and experience from all these years and how user data is critical to getting ahead & winning the eCommerce race in South Africa.

    For the purpose of Krish’s keynote address, we tracked pricing insights for a finite set of categories across key South African retailers like Checkers, Pick n Pay, EveryShop, Incredible, Makro, Waltons, Shoprite & Dis-Chem to name a few over a period of 16 months from Dec 2020 to April 2022. We highlighted price increase and decrease opportunities and how each retailer reacted in order to stay competitive, increase sales and protect margins. 

    BATTLE of the eCommerce GIANTS!

    Key Highlights from the Keynote

    • Increasing prices where an opportunity exists helps retailers increase their margins exponentially. Pick n Pay had the highest action rate (73%) when it came to capitalizing on price increase opportunities v/s Dis-Chem at 11%. 
    • When it came to price decrease opportunities (in order to stay competitive with rival brands) Takealot was the most responsive retailer – they capitalized on 30% of the opportunities, followed by Pick n Pay at a close second (28%) and Shoprite & Dis-Chem at just 4%.
    • Most retailers took between 1 – 5 days maximum to make price changes which means responsiveness to the market among all retailers is high making it more important for online retailers to always be on their toes.  
    • The 2 categories where most retailers capitalized on Price Increase Opportunities were Sauces & Condiments and Crackers & Biscuits.

    Want to watch the Keynote video on Demand? Click here to register & watch.

    Price Increase & Decrease Opportunities
    Price Increase & Decrease Opportunities

    Bonus video content! 

    • Watch the Impact of price increase & decrease opportunities on Private Label brands! 
    • See how product stock availability impacts price changes over a 16-month period. 
    • Find out which brands are in the lead in the Skin Care, Pet, Baby, Laundry & Cleaning Aid categories 

    If you’re an online retailer in South Africa & need insights on staying competitive with the right pricing, product assortment, delivery time, delivery rates, and the other key influencers that affect customers’ choice of online retailers, sign up for a demo with our team at DataWeave to know how we can help!  

  • The Rise of South African eCommerce : The Growth, & the Future

    The Rise of South African eCommerce : The Growth, & the Future

    2020 onwards, the South African economy was crippled due to the pandemic and lockdowns. However, according to StatsSA, South Africa’s online retail market share grew to 2.8% in 2020, double that in 2018. After the pandemic, South Africa’s eCommerce industry grew by 66% in 2020 compared to the year before. This increase was primarily because of restrictions on traditional stores that led to a 30% reduction in in-store purchases. 
    According to a Deloitte study, over 70% of South Africans shop online at least once a month because of convenience. Household appliances, footwear, clothing, electronics, and health products are the most popular categories among South African online customers.

    Top Categories
    South African Ecommerce
    South African Ecommerce


    These eCommerce stores account for 15% of online revenue in South Africa

    1. Takealot.com: Revenue US$602 million 
    2. Superbalist.com: Revenue US$85 million 
    3. Woolworths.co.za: Revenye US$57 million

    In this blog, we will discuss emerging eCommerce trends in South Africa and their impact on the various retail segments. 

    Trends to watch in 2022

    Trends to watch
    Trends to watch

    1. Quick commerce

    Quick delivery, especially when it comes to groceries, medicines, and food has become a customer expectation now. Q-commerce, a trend that capitalizes on optimizing delivery time, has become common in food tech companies and is now gaining traction in grocery delivery too, especially after the pandemic. UberEats, Checkers, Pick ‘n Pay, and Jumia is some of the country’s biggest Q-commerce players.

    2. Omnichannel eCommerce

    Omnichannel experience has taken center stage for retailers in South Africa after the pandemic. According to Nielseniq’s study, 30% of South African consumers indicated they had shifted their shopping habits to online shopping from in-person grocery store visits between March 2021 and 2022. 

    3. Digital Payment Trends

    The digital payment ecosystem in South Africa has seen a massive growth trajectory after the pandemic. Customers seamlessly use digital payments across shopping, entertainment, groceries, food, health, and wellness – a trend we suspect is here to stay.

    4. Buy Now Pay Later

    Buy now pay later is an interest-free mode of payment that is popular worldwide for helping customers who cannot make high-value purchases. Consumers don’t have to pay any price upfront and pay off the amount in interest-free installments over a predefined period. The BNPL is forecasted to account for 13.6% of global eCommerce payments by 2024.

    5. Chatbots

    Quick response to customer queries and problems is instrumental in increasing conversion rate and sales. However, it can be difficult to respond to emails and instant chat 24/7 for small businesses. This is where automated chatbots are helping South African retailers answer customer questions promptly and correctly.

    The 4 Fastest-Growing Retail Segments

    4 Fastest-Growing Retail Segments
    4 Fastest-Growing Retail Segments

    1. Online Retail

    eCommerce & online retail grew 20% YOY after the pandemic. Retailers saw a huge increase in the adoption of online shopping by consumers. Traditional brick-and-mortar stores looked for omnichannel opportunities to keep up with online retailers. Mr. Price, a clothing retailer in South Africa, saw a surge in online sales by a massive 90% between April and June 2020. There is a similar success story where OneDayOnly, another South African online retailer, saw 40% growth during the same period.

    … but this growth surge brought in some challenges for retailers too. With more and more customers shopping online, competition increased. Price-sensitive customers would constantly compare prices across online retailers before making a purchase. It became critical for retailers to price their products right to beat the competition & win the sale, without hurting their margins! 

    2. On-Demand Grocery Delivery

    Groceries saw an increase of 54% from 2019 driven by the pandemic & lockdown restrictions.

    South African eCommerce companies offer a wide range of on-demand services, from taxi rides and grocery orders to liquor delivery. Retailers fulfill orders from stores to offer affordable rates and quick delivery across South Africa. It replicates the instant gratification of purchasing products from brick and mortar stores and the added benefits of the hyper convenience of shopping from a mobile or a computer. 

    Read quotes from our customers at Talabat, Glovo & Grab Food – we worked closely with them & helped them in their efforts to scale through this global Q-Commerce boom.

    3. Online Food Delivery

    According to Statista, revenue in the online food delivery segment in South Africa is projected to reach US$0.87bn in 2022. As competition heats up and more and more players enter the market, staying competitive is becoming increasingly challenging for food delivery businesses.

    Bolt Foods SA said they grew 50% month on month in mid-2021 and said they had to bet on making sure they were offering competitive prices in order to get ahead. Additionally, in their quest to have a stronger competitive advantage, Bolt Food says it is also offering customers a very low delivery fee, lower than Uber Eats & Mr. D since delivery costs are a major consideration for customers when using food delivery apps.

    The right price, product assortment, delivery fee, and delivery eta are critical to scaling a Food Delivery business. If you’re in the food-tech business, reach out and we can tell you how DataWeave’s Food Delivery Intelligence can help you scale quickly and profitably! 

    4. Social Commerce

    With approximately 41.19 million South African customers engaging in online activity, there is a huge shift in user behavior as customers get comfortable purchasing directly via social platforms instead of online retailers or physical stores. Social commerce uses networking websites such as Facebook, Instagram, and Twitter as vehicles to promote and sell products and services.

    What matters to South African online shoppers?

    Between June and November 2020, South African consumers mostly used online retailers monthly (42%), food delivery services weekly (36%), and online classifieds less than once a month (34%). 

    Here is a summary of things that matter to South African shoppers when they shop online:

    1. Easy product discovery and competitive pricing

    Most customers start their online shopping with a product in mind and look for discounts and sales across retailers. More than 67% of respondents of a survey have said that they go to a specific online store and search for the product they want. Almost the same share of consumers said they compare online stores to find offers for products they want. Price plays an important part in product selection. 

    In order to offer the most competitive pricing, retailers in South Africa need to keep a keen eye on competitor pricing. They need to identify gaps and opportunities to make price changes to not only offer the most attractive price to customers but also drive more revenue and margins by pricing products right.

    2. Reliable Delivery time

    81% of South African consumers say that unreliable delivery time is one of the reasons that affect their choice of an online store. Quick delivery time has become a differentiator in the eCommerce space, where ‘next day delivery or even ‘same-day delivery’ have become the norm. South African online shoppers want reliable delivery times that suit their busy schedules. 

    Read more here, about how DataWeave helped an America QSR understand the correlation between their delivery time & sales volumes! 

    3. Low delivery fee

    86% of South African customers believe that high delivery fees impact their online stores’ choices. The high delivery cost is a problem for low-income customers and customers who shop daily.
    If you want to track how your delivery fee compares to your competition and how it’s impacting your sales, our Food Delivery Intelligence solutions are for you!

    4. Customer Service

    Your company’s customer service should be responsive, smooth, omnichannel, and hassle-free. 78% of South African customers are frustrated with delays in customer support from online retailers. Slow response times and lack of communication in case of delays, delivery, and refunds hamper the customer experience drastically.

    Customer Service
    Customer Service

    Conclusion

    eCommerce in South Africa is growing at unprecedented rates. There has been a surge in the appetite of South Africans for online shopping and online retailers across the board are gearing up to meet this demand. 

    If you’re an online retailer in South Africa & need insights on staying competitive with the right pricing, product assortment, delivery time, delivery rates, and the other key influencers that affect customers’ choice of online retailers, sign up for a demo with our team at DataWeave to know how can help!  

  • Share of Keyword Search Cinco de Mayo 2022

    Share of Keyword Search Cinco de Mayo 2022

    As inflation continues to hike costs for consumers and supply chains challenge them to maintain loyalty, there is still an active audience willing to pay the ultimate price for the convenience of food and alcohol delivery. That being said, we analyzed 8 popular Retail and Delivery Intermediary websites and 11 popular ‘Cinco de Mayo’ keywords to see which Brands are predicted to win the battle of Digital Shelf Share of Search this holiday.

    2022 Cinco de Mayo Share of Search Insights - Top Brands for 'Cinco de Mayo'
    2022 Cinco de Mayo Share of Search Insights – Top Brands for ‘Cinco de Mayo’

    Opportunities for Food & Bev on Cinco de Mayo

    While most of our analysis focused on popular Cinco de Mayo food and beverage products, none of these brands populated on either Target (pictured on left below) or Walmart (pictured on right below) page 1 search results for the term ‘Cinco de Mayo’. Keyword search results for this term are dominated primarily by décor brands as indicated below.

    Brands Achieving Top Share of Search for Food and Beverage Categories on Cinco de Mayo 2022
    Brands Achieving Top Share of Search for Food and Beverage Categories on Cinco de Mayo 2022

    Share of Keyword Search Results – Alcohol Category

    Three of the most popular alcohol types sought out during Cinco de Mayo are ‘Mexican Beer’, ‘Mezcal’, and ‘Tequila’. Below are the brands dominating Share of Keyword Search results on each of the major retail websites we researched.

    AmazonFresh, Meijer, Kroger, and Sam's Club Share of Search - Beer, Mezcal, and Tequila Keywords on Cinco de Mayo 2022
    AmazonFresh, Meijer, Kroger, and Sam’s Club Share of Search – Beer, Mezcal, and Tequila Keywords on Cinco de Mayo 2022

    We also reviewed the same keyword performance across popular delivery intermediaries to see how Share of Keyword Search altered for ‘Mexican Beer’, ‘Mezcal’, and ‘Tequila’. The results are below for TotalWine, Instacart, Drizly and GoPuff:

    TotalWine, Instacart, Drizly, and GoPuff of Search - Beer, Mezcal, and Tequila Keywords on Cinco de Mayo 2022
    TotalWine, Instacart, Drizly, and GoPuff of Search – Beer, Mezcal, and Tequila Keywords on Cinco de Mayo 2022

    The keyword ‘Agave’ is also a popular search term within the alcohol category during the time leading up to Cinco de Mayo. We reviewed keyword search performance at various zip codes to see how price points that populated on page 1 search results varied given the change in median income. Below are the results:

    Share of Search for Alcohol by Price Point and Zip Code on AmazonFresh
    Share of Search for Alcohol by Price Point and Zip Code on AmazonFresh

    Share of Keyword Search Results – Grocery Categories

    We also reviewed some of the most popular grocery items purchased during Cinco de Mayo by Keyword Share of Search results to see which brands are primed to win the Digital Shelf this year. Below are the results for Target.com and Walmart.com.

    Walmart and Target Share of Search - Food and Beverage Keywords on Cinco de Mayo 2022
    Walmart and Target Share of Search – Food and Beverage Keywords on Cinco de Mayo 2022

    Below are the results for the same popular grocery items and alcohol keywords related to Cinco de Mayo and the page 1 results seen for Brand Share of Search on Safeway.com.

    Safeway Share of Search - Food and Beverage Keywords on Cinco de Mayo 2022
    Safeway Share of Search – Food and Beverage Keywords on Cinco de Mayo 2022

    Access to these types of real-time digital marketplace insights can enable retailers and brands to make strategic decisions and help drive profitable growth in an intensifying competitive environment. Be sure to reach out to our Retail Analytics experts for access to more details regarding the above analysis, and let us know what other holiday insights you’d be interested in seeing this year. Happy Cinco de Mayo!

  • The Rise of On-Demand Grocery Delivery after the Pandemic

    The Rise of On-Demand Grocery Delivery after the Pandemic

    Before the pandemic, the grocery industry was set around brick-and-mortar stores, and there was a slow movement towards on-demand grocery. Online grocery delivery was still considered a peripheral channel. However, grocery shoppers started turning to on-demand platforms since the onset of COVID-19. According to Acosta’s report, since the pandemic, 45% of customers prefer online grocery shopping over physical stores. 

    COVID-19 drastically accelerated the online grocery delivery trend, increasing 10% and 15% of total grocery sales during the peak COVID-19 time. In the U.S., online grocery shopping reached nearly $90 billion in sales in 2020, increasing by more than $30 billion. 

    In this article, you’ll learn about the early pioneers of online grocery delivery in the U.S., the modern players, and the impact of COVID-19 on grocery trends.

    Early pioneers of online grocery delivery

    Early pioneers of online grocery delivery
    Early pioneers of online grocery delivery

    In the late 1990s, consumers had just started ordering products online. Online grocery shopping was an early area of focus. It offered lucrative rewards to high-spending consumers, increased convenience, and saved them time. Peapod, founded in 1989 by brothers Andrew and Thomas Parkinson, was the first online grocery delivery service. Back when they started, users had to install software from CD-ROMs and then place orders. Though it took years to become a well-known name in the industry, Peapod is still in business.

    Webvan and HomeGrocer.com were two other early pioneers of online grocery delivery that started in 1996 in California and 1997 in Washington respectively. Webvan had a successful launch in California, and they had aggressive expansion plans to operate in 26 major cities around the United States. However, the company filed for bankruptcy less than two years later. HomeGrocer.com quickly created the infrastructure needed to support the business, including a fleet of vans and a huge warehouse. They had impressive early growth, and sales reached over $1 million a day by mid-2000. They expanded into other markets, including California, Georgia, Oregon, Texas, and Illinois.

    Modern players of the on-demand grocery delivery

    Modern players of the on-demand grocery delivery
    Modern players of the on-demand grocery delivery

    Online Grocery Trends Post-Pandemic

    When COVID-19 first began to engulf the world, supermarkets and grocery delivery platforms like Amazon Fresh and Instamart became overwhelmed with huge demands. To handle the surge of online orders, stores had to make drastic changes to accommodate the switch to on-demand delivery requests. Popular grocery delivery brands had to introduce waitlists and online queues for new customers. According to a poll, 53% of shoppers would continue online grocery shopping because they had a good experience, indicating that the on-demand grocery trend will continue post-pandemic. 

    mckinsey grocery report
    Mckinsey Grocery Report

    As shoppers prefer more digital channels in their path to purchase, the on-demand grocery trend is becoming much more significant for both consumers and brands. According to a McKinsey and company survey, frozen fruits, health care items, fresh fruits and vegetables, packaged foods, household care items, beverages, and deli meats categories are likely to remain popular among U.S. consumers post-pandemic. Meanwhile, CoreSight Research found that fresh fruits and vegetables were the biggest bestsellers from 2020-to 2021 followed by fresh dairy, meat, eggs, frozen food, and bread and baked goods. 

    Why Grocery Shoppers are going digital

    Online ordering offers a more personalized experience to shoppers as they get recommendations for products that are often bought together. When paired with data analysis and AI-powered algorithms, grocery stores could work on targeted marketing and offer quick delivery services. 

    1. Flexibility

    On-demand grocery shopping offers customers a wide range of delivery options, including subscription services, buy online pick up in-store, click and collect, option-based pricing, and much more. This offers choice and accessibility to modern customers looking for speed and convenience.

    2. Convenience

    With the increasing focus on social distancing and safety, shoppers started to rely on delivery services rather than waiting in long queues and risking exposure. The focus and priority of grocery shoppers shifted from discounts and pricing to convenience, speed, and safety. Online grocery shopping order methods also differ by generation. 40% of millennials prefer to shop groceries on mobile, and 52% prefer computers. Similarly, 66% of Gen X prefer to shop on computers, and only 27% prefer to shop on smartphones. 

    Grocery Shoppers are going digital
    Grocery Shoppers are going digital

    3. Speed

    The fierce competition in the on-demand grocery delivery space has led to small delivery times. Startups like GoPuff (30 minutes), and Jiffy (15 minutes) are competing with the big boys like Walmart and Amazon Fresh to deliver groceries in under an hour. Quick delivery options like two-hour delivery and same-day delivery have made it easier for customers to shop for fresh produce. Customers can quickly order a few items for a specific recipe and get it delivered within a few hours

    4. Multiple payment methods

    At store checkouts, cash and card are the only two acceptable options. Customers prefer to have more options in today’s modern world. Online grocery shopping makes buying easier by offering multiple payment options like PayPal, credit/debit cards, and monthly payment plans that negate the delivery fees for each delivery.

    How to successfully run a Grocery Delivery Business?

    The increasing demand for speed and convenience puts pressure on the grocery industry that faces inventory issues like fresh produce and product availability. However, the benefit of online grocery delivery services is that it provides insight into the end-to-end view of the customer journey. Grocery delivery brands can use the data to design services and models that meet customer demand and minimize costs across the supply and distribution chain. 

    If you’re a Grocery Delivery company and want to track your delivery time, or product catalogue so you can boost sales with an in-demand product assortment, or you want to drive more revenue & margin by making sure your products are priced right v/s your competition, reach out to us at DataWeave! Sign up for a demo with our team to know how we can help you optimize your online sales.