As I write this, we’re into the month of May and it’s now clear that COVID-19 won’t disappear any time soon. While we all hoped this would be a short-lived inconvenience, brought under control by a few weeks of social distancing, there’s still a long road ahead before we’re in the clear.
As everyone tries to make sense of these “uncertain times” and come to grips with the “new normal,” one thing’s for sure: We’re in for a marathon, not a sprint. As such, it’s essential that we all focus on long-term planning.
What Will the Grocery Industry Look Like for the Remainder of This Crisis?
In my previous article, I highlighted data showing where the grocery industry currently stands. Numbers across the Mercatus platform show droves of new online shoppers who will likely continue to embrace the e-commerce route to maintain physical and social distancing.
Grocers are scrambling to keep up with this demand—hiring help, capping purchases of some products, limiting SKU counts, creating waitlists for e-commerce functions and more. Meanwhile, shoppers who have opted for delivery have run into repeated service roadblocks and largely have given up on the idea of same-day delivery. But how long will their patience last?
States across the U.S. are moving forward with plans to slowly reopen, but medical and science experts warn us that we will be living under virus conditions for some time to come. Best estimates are that a vaccine is 12 to 18 months away. And if the lessons from previous pandemics hold true, we will experience several recurrences of coronavirus outbreaks.
For the grocery sector, it’s worth making some educated decisions about where to invest in the uncertain times ahead. There’s little likelihood of a complete return to pre-outbreak in-store shopping behavior. More so now than ever, grocers will be relying on their e-commerce infrastructure to cater consumers preferring to eat at home than dine out.
How Do You Keep Shoppers and Employees Safe?
The primary goal for every grocer in the near and long term should be the health and safety of their employees and shoppers. Making this a priority will be appreciated (and expected) and will build confidence and loyalty across all parties.
Physical distancing will continue across North America as people begin to slowly leave their houses, with newly formed habits to keep healthy and safe. In fact, some researchers believe physical distancing measures could be necessary until 2022. While this scenario is hopefully not the case, grocers need to be prepared to continue safety measures for the long haul, including:
- Cleaning and sanitizing stores: IGA noted that shoppers say just the smell of chlorine and bleach makes them feel safe.
- Sharing health and safety best practices: Showcase proper food handling, regularly wash hands and/or sanitize, cough/sneeze into one’s elbow, and avoid touching one’s face.
- Encouraging physical distancing: This may include limiting the number of shoppers in the store or placing markers six feet away throughout the store. Additionally, promoting e-commerce enables shoppers to stay out of the store entirely.
How Can E-Commerce Help Grocers?
Ramping up e-commerce is one of the vital ways stores are meeting the needs of their customers. The truth is that there’s no telling when things will go back to “normal,” and e-commerce will be crucial during this long-lasting outbreak and beyond. Before the pandemic, there was a rising interest in online grocery, but now COVID-19 has sparked a pivotal moment for e-commerce adoption. However, success will depend on how quickly a retailer can adapt their business model to serve predominantly online sales with curbside pickup. This means that organizations must be ready to make agile, strategic decisions.
Why Changing Store Formats May Work
As the volume of online orders grow, some grocers may consider turning select locations into dark stores. In doing so, grocers can fulfill more orders in a timely fashion and alleviate shoppers’ frustrations with constrained fulfillment time slots. This approach, and other initiatives such as limiting the number of in-store customers, will help grocers prioritize safety, manage inventory and create a rewarding experience that will keep shoppers coming back, even after the worst of COVID-19 is over.
Don’t Lose Sight of Your Long-Term Interests
The initial COVID-19 sprint has undoubtedly caused panic, especially among those without robust e-commerce fulfillment initiatives in place. Many of these grocers may be tempted to rush into deals with third-party delivery providers to boost their online capabilities. However, it’s essential that these retailers don’t fall victim to contract terms that will hurt them in the long run.
You’ll want to avoid margin-eating terms. Avoid vendor lock-in. Work with partners that can integrate with your existing technology stack and will continue to innovate and support your online business as it grows. Lastly, insist that you as the retailer maintain control of your shoppers’ data regardless of where the order emanates. Rigorous and sometimes challenging conversations are necessary, even when time is of the essence.
No one knows how and when exactly this pandemic will end. Without that finish line in sight, grocers must adopt a long-term mindset. Take every day’s developments into account to make informed decisions about long-term health while still keeping your customers and community safe.
Sylvain Perrier is president and CEO of Mercatus Technologies, Toronto.