The online grocery market is one of the biggest in commerce. Some have estimated the UK market alone to be worth £200 billion annually as consumers embrace online groceries in vast and ever-growing numbers.
In fact, when it comes to online grocery shopping, the revolution is already underway. Recent Spryker research revealed that 60% of UK consumers are already doing some food shopping online. Furthermore, within two years, one in four Brits sees themselves buying most of their groceries online.
Customer experience is key to differentiation in this crowded space, populated by traditional supermarkets, specialist delivery firms, grocery start-ups, and more. To deliver a CX that encourages loyalty, the right technology platform is essential. And this means deploying a highly customised tech stack – composable commerce – rather than making do with a monolithic, legacy commerce platform.
Online groceries – the future is here
Make no mistake, the future of grocery shopping is very much online. Although the UK has more supermarkets and smaller grocery retailers than most other markets, and our research revealed that 82.5% of respondents say they enjoy supermarket shopping, this is not sustainable. It can be explained by the high proportion of delivery options in large urbanisations. Such services would likely be widely utilised if there were more options in rural areas.
For any grocery store that still places greater emphasis on its physical stores, this is a growing problem. It is especially true when you factor in the generational shift that sees far more younger people order groceries online than older demographics.
While physical stores aren’t going to disappear overnight, it does become clear that the key battleground for grocery shopping will take place online. Providers must differentiate and offer their customers the very best experience possible.
How to use tech to deliver on CX
Owning customer access is essential to improving CX, an advantage traditional supermarkets have over pure delivery services. Owning customer access presents an enormous opportunity for supermarkets to differentiate, focusing on what they sell and how they sell it.
Achieving this is possible but it’s challenging when using the cumbersome and ageing technology infrastructures still in use at many of the bigger grocery retailers. These platforms are just not suited to the demands of modern commerce. They are inflexible and make adding on the additional services and features that really differentiate CX much harder.
A far more effective approach is for online grocers to adopt a modular route to commerce. This composable commerce methodology involves selecting best-of-breed solutions in order to ‘compose’ a highly customised tech stack. This allows a grocery retailer to roll out those new features, engage with customers using their preferred medium and even offer unique pricing and offers according to that customer’s preferences and needs.
Don’t ‘make do’ with legacy tech
This can all feel like a major shift for supermarkets. While some have adapted reasonably well to the online grocery market, they have done so mostly relying on legacy systems. For the new order in online groceries, a world of CX, differentiation and agility, those old systems will not be fit for purpose.
A composable approach significantly improves a grocer's ability to deliver first-class CX, and there are many other benefits too. It is far easier to use best-of-breed applications and to replace or move them as the business needs change, all without affecting the rest of the architecture.
This seamless integration and use of open standards is vital. It makes it simple to deploy out-of-the-box components and ensures no lengthy and costly vendor lock-in. Furthermore, composable commerce offers unparalleled agility and scalability as a grocery retailer's business changes – and it will change in such a dynamic market.
Adopt the tech that will drive innovation
Customers want unique experiences; the only way to deliver them is by being flexible enough to adopt the modern technologies that drive innovation. The flexibility of composable commerce and a customised tech stack is crucial in delivering a personalised CX and providing differentiation in a crowded online grocery market.
With consumers accessing online stores from multiple channels, any grocery store not embracing an omnichannel strategy will struggle against those that do. As online grocery shopping becomes the norm, differentiation and personalisation in CX become key. This is not possible without a highly customised tech stack, which is essential for any grocery retailer looking to maintain and grow its share in this highly lucrative market.
Alexander Graf is Co-Founder & Co-CEO of marketplace experts Spryker and author of the bestselling book, The E-Commerce Book.