Whether, you like it or not, there are clear discernable reasons why shoppers prefer big online stores like Amazon. Consistent discounts, reliable product quality etc. No matter what you are purchasing, sure savings and peace of mind won’t hurt.
At the same time, this makes it harder for the smaller retailers to compete with the big online grocery retailers. Usually, cheaper prices mean compromised products quality and eroding profit margins to the businesses.
Simultaneously, the online Grocery market does pack-in tremendous opportunity as well.
The fast moving consumer goods industry is the fourth largest industry in Indian economy. The market size of FMCG is expected to grow from US$ 30 billion in 2011 to US$ 74 billion in 2018. According to the report of India Brand Equity Foundation, it will probably reach $103.7 billion by 2020.
Due to high level of competition in the market, customer relationship management plays vital role in the growth of any business. As food product is the largest consumption category in India (nearly 12% of country’s GDP), customers expect higher quality product and service from online grocery stores.
Let’s begin by understanding the major aspects of customer’s behavior as they visit an online grocery store.
Major Aspects of Grocery customers’ Behaviors
- Now customers have more access to information, thanks to extensive use of internet. This leads them to having a great number of purchase choices and different quality options.
For example – near about 70% of customers read food labels before making a purchase.
- According to Allrecipes.com study repost, one-third of consumers check online prices, nearly half of them research products, and more than half find product promotions on their smart phones.
- The big online stores have made online customers accustomed to receiving significant discounts.
- Now, consumers recognize that grocers are gathering information about their previous purchases and search history. They expect them to use that information to provide better shopping experience.
Increasing preference of online grocery shopping stores add something more to the competition. Let’s see why consumers prefer online stores for grocery shopping –
Chief Challenges Facing by the Small Retailers
The consumer needs are changing gradually. With the changing requirements, online retail companies are facing seven major challenges today.
- Managing effective communication system with consumers: Customers always have thousands of enquiries regarding the product, shipping status, shipping charges, delivery time, delivery person’s details and many other things. Especially for the online grocery stores, where the products are expected to be delivered as soon as possible, it is necessary to build a strong communication system among customer service, delivery boys and the consumers.
- Managing a positive online profile – By its very nature, the online consumers are more likely to be aware of their products and purchases. This means that small or large businesses need to cover their online media category and product interests. This helps business to really focus on creating new user accounts for their businesses.
- Managing the online enquiries – as the grocery store will drive regular purchases, you need to make sure that you are handling online enquiries regularly. This helps cultivate regular online purchases and definite buying habits.
- Difficulty to penetrate in small towns: In small towns, people are not yet accustomed to online grocery stores. They are used to traditional food and beverage shopping and have major trust issues with online delivery policy.
- Discovering the loyalty Factor: Gaining customer loyalty is one of the critical challenges of small online grocery business. The retailers offer rebates, special coupons, free shipping and discounts as incentives to consumers. However, the consumers keep shifting from one app to another to find out better deals.
- Balancing the discounts and profitability aspects – The online stores could positively repel the customers by following the wrong pricing dynamics. You need to understand and create an accurate customer profile to buy the products at the right discount.
- Tracking the buying pattern of consumers: It is difficult to track and understand the customer’s buying pattern, by analyzing purchasing history of each customer. Unless you can understand the consumer’s buying behavior, you cannot able to provide the personalized service and offers.
CRM Solutions for All the Challenges
In order to sustain in this competition and thrive in online business, you need to develop initiatives for increasing product profitability with efficient customer care service. CRM can help you reach there.
- Excellent customer care service: FMGC CRMsoftware will provide you a common platform to receive customer’s phone calls, reply on the messages, mails and resolve their issues. You can save customer contact details, along with order summaries and call history details in the dashboard. You can track a particular query with the unique ticket number that makes it easy to answer the customer’s questions.
- Easy data management to reach out the potential customers: Easy data management software leverages the business strategy to reach out the potential customers. Surveys, buying histories and zonal requirements understanding help to make appropriate product promotion and create brand awareness.
For example – in Bengal and Odisha, people are more likely to buy fish than other non-vegetarian items. Online meat stores can promote fish or perhaps offer special discounts on fish, in order to increase awareness and loyalty.
- Enhance brand loyalty by offering personalized rebates and discounts: With a CRM software you can have all the product search history of the customers. Thus, you can act on customers’ preferences and offer them personalized discounts on particular products. This helps to strengthen long term relationships between company and consumer.
2017 won’t be without challenges for food and beverage online retailers. Consumers’ choices are unpredictable, and targeting them with the accurate strategy is even more difficult. But when companies look inward to find ways to be more nimble and integrate a CRM software, the way becomes easier than ever.
Online grocery store business in India is poised to grow between 10%-12% annually. And as Asheesh Molhotra (Partner, IT Advisory Practice, Ernst& Young) has said correctly, “this is one of the best time for technology to make a difference in the FMCG sector.”