It was bound to happen. First, it started with a few online storefronts that sold specialty goods and then durable goods followed. After that, e-commerce started to shift the way consumers shop. Over the last few years, e-commerce sales have risen sharply.
In 2016, 11.7 percent of total retail sales in the U.S. were purchased online according to Digital Commerce 360. Sales reached $394.86 billion, which was a 15.6 percent growth from 2015.
With such a growth trend, consumers are now getting used to the convenience online shopping brings. In addition, comparison-shopping is much easier when everyone has the ability to check multiple prices with just a few clicks. With convenience and faster delivery options available, consumers are now shopping online for CPG products too.
According to a report from One Click Retail released this week, brick and mortar retail saw revenues decrease by 10 percent within the baby category during first quarter of 2017. However, e-commerce sales made up for losses by seeing the same category increase up to 22 percent. Furthermore, the increase no longer represents larger CPG goods for items like diapers.
Both Amazon and Walmart now offer fresh grocery items via e-commerce. Many other grocery chains are starting to follow suite. In some cases, regional and local chains are also in a good position to offer similar services, but may need to rethink current distribution methods.
Serving online shoppers fast takes more than just a reserved pick-up parking space at the nearest grocery store location. Many more regional retailers are working to add automation to distribution centers in order to service loyal shoppers. Smaller chains are working closely with co-op buying groups and wholesalers to do the same.
The equivalent of the in-store experience that shoppers have come to experience now needs to come in the form of same or next day delivery and with a touch of personalization. Even fresh and frozen items are picked and packed from distribution centers and shipped for same or next day delivery. Many retailers are retrofitting a portion of their distribution center or adding new ones to service online growth. Some CPG items never even make it to the brick and mortar shelf.
The touchpoints are different, but consumers still need to have the same great service and experience they have grown to trust from a familiar grocer. Longstanding grocery stores need not lose a lifelong shopper to e-commerce—they simply need to rethink their supply chain.
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