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Online Markets Changing the Way Consumers Shop for Groceries

By Jazmine Woodberry

An increasing number of consumers across the country are ordering their groceries online, both from dedicated web outlets and from the digital iterations of brick and mortar stores, simply having these groceries delivered to them at home. Now, specialty foods companies are looking to adapt to this new retail climate in a $1 trillion grocery retail industry where more than $4 billion are spent by companies on online ads each year.
Working with more than 140 grocery brands, including Kroger, Shoprite and Albertsons, as well as more than 200 Consumer Packaged Goods brands, MyWebGrocer provides a suite of leading-edge eCommerce and eMarketing solutions to the grocery and CPG industries, with products for every digital touch point. Grocers can utilize MyWebGrocer’s software platform where shoppers can head online and do a range of things—from creating shopping lists, acquiring coupons and pulling up digital promotionals, to purchasing goods online for home delivery. Consumer packaged goods companies have the ability to follow a different path, with digital marketing campaigns for grocery websites, as well as ways to measure the effectiveness of those digital advertising efforts.
“Changing consumer behavior is pressuring grocers and CPGs to adopt digital solutions,” said Hudson Smith, Principal at HGGC, a MyWebGrocer investor in a release. Smith said he thinks “new eCommerce-focused entrants seeking to take share from traditional grocers” can look to online grocers both to shop online and enrich brick and mortar experiences via digital offerings.
MyWebGrocer is not alone in the push to move the grocery industry online. Founded in 1989, online grocery ordering and delivery service Peapod now serves customers in Illinois, Wisconsin, Indiana, Maryland, District of Columbia, Virginia, Massachusetts, Connecticut, Rhode Island, New Hampshire, New York, New Jersey and Pennsylvania. Peapod offers a unique online grocery shopping option that fits into consumers’ busy lives.
“In a time when schedules are more demanding than ever, Peapod offers more than an online shopping service—it’s a lifestyle solution,” said Bradley Porter, Peapod’s Director of Marketing. “And it’s evolving to help people knock out their grocery shopping wherever and whenever they’d like via a Peapod mobile app, virtual stores, and more.”
Peapod is expanding convenience with home delivery or drive-through-style pick-up. Same day, next day and advance scheduling are available, accommodating “anytime, anywhere” grocery shopping with a handy mobile app and virtual stores. Peapod also adds value with built-in sorting features for nutritional requirements and a ‘checkout counter’ that helps manage spending as you go. In a Consumer Reports study from fall 2012 on how online grocery shopping eases grocery bills, Peapod.com topped the list as a money-saving site where shoppers can spend less and get more.
In addition to dedicated online grocery services like Peapod, food retailers are also utilizing other online venues, not usually known for their edible offerings. This includes online megastore Amazon.
Daphna Havkin-Frenkel’s business, Bakto Flavors, started in 2006 with a few options but has since expanded to several dozen gourmet spice and flavoring options that move far past the company’s initial vanilla starting point. The growth of Bakto Flavors has been in part due to the availability of Bakto Flavors’ products on Amazon. With Amazon behind the company’s sales, the former small shop now has global customers.
According to Havkin-Frenkel, Bakto Flavors still utilizes brick and mortar stores in the New York City area to reach consumers, but the company’s proprietary website sales, partnered with the sales it makes on Amazon have made the Internet the company’s biggest overall sales forum.
Of course, despite the growing trend of online grocery sales, experts are quick to point out that time honored physical trips to the grocery store are not going away any time soon. Still, retailers and CPG companies that are not yet online would be wise to consider this as an important venue for future sales. “While weekly trips to the grocery store are a time-honored tradition, consumers in 24 markets across the country are eating up the idea of online shopping…where hand-picked, hand-delivered groceries are always just a click away,” Porter said.

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