Will E-Commerce Kill The Supermarket?
No matter where you live, chances are you’ve seen the internet kill at least one retail business near you. This shouldn’t come as a surprise: last year, retail closures were up 60% from 2018. The trend has been dubbed The Retail Apocalypse.
But it’s not only retail that’s suffering; major grocery stores and supermarkets have also had to fight to stay alive.
Your way, right away
Customers don’t want to eat the traditional way anymore, whether it’s because it’s too expensive, too inconvenient or too time-consuming. Think of all the channels that exist now: meal kits, Amazon, grocery delivery. It’s safe to say that the effect of those channels recently sent two longtime grocers—Fairway Mart on the East Coast and Earth Fare in Colorado—into bankruptcy. And it’s predicted that US supermarkets will decline 6 percent in the next five years.
I mentioned in one of my last posts that farmers need to meet customers where they are—not just where they’ve been or where the farmer believes they should be. Grocers and supermarkets are no different. Serving consumers will never be business as usual. Any company enamored with the status quo will find itself perfectly positioned to fail.
The way we were
In the early 1990s, most consumers went to a supermarket and filled in the gaps with specialty items from mom-and-pop shops. Then came the era of club stores, in which consumers purchased most of their groceries at Costco and Sam’s Club, ditching mom-and-pops to fill in the gaps with supermarkets.
But now, consumers can order anything they want online, and supermarkets are falling behind. Customers are putting money where it’s easiest to do so, and right now, that’s delivery.
Side note: While it’s hard to argue with the convenience of fruit, vegetables, proteins, bread, and butter magically appearing at my front door, I personally prefer to shop in the grocery store. I like to scan the labels, see what looks good and not-so-good. Yes, it’s market research for me, but I also like to pick the food I feed my family versus someone else doing it. That’s me personally, but that’s not where the trend is going.
Be nimble, quick
As a farmer, I’ve definitely had to get creative with my business to stay in the game. If I could give a bit of advice to supermarkets, I’d say: listen to your customers. It’s no longer the early ‘90s, and they’re no longer interested in shopping the old way.
I know that grocery stores run on super-thin margins, so the stakes are high. Look at what’s happened in the textile industry, retail, and the good ‘ole mall. That shift is going to continue to spread into all other markets because people’s tastes and preferences change all the time. But if you stay engaged with them, think creatively, and do the research and development, you’ll grab not only their attention but their dollar, too.