Western Grocer Serving the industry since 1916
By: Mike Yeo
COVID-19 fast tracks the need for stronger E-Commerce platforms.
While the grocery industry has seen its sales rise dramatically because of COVID-19 ‘s impact, physical brick and mortar stores have seen much less traffic and grocers are challenged to find new ways to engage with their customers.
If there’s one good thing that has come out of this pandemic, it’s the fact that COVID-19 has pushed engineers and software developers to work on perfecting their e-commerce platforms, making them as consumer and user friendly as possible. While this is an ongoing process, with constant improvements and upgrades being made to meet consumer demands and complaints from non-users, the steps that have been made since COVID have advanced e-commerce quicker than ever before.
Retail e-commerce sales have risen steadily, with the proportion of online sales rising from 2.4% in 2016 to 4.0% in 2019. The month of April experienced a peak in the COVID-19 impact, with the proportion of retail e-commerce sales jumping from 3.8% in April 2019 to a record high of 11.4% in April 2020. In May of 2020, as the Canadian retail environment allowed for more in-store purchases, the proportion of retail e-commerce sales was 10.0%.
The share of Canadians who shopped online for groceries increased from a mere 5% in 2016 to 17% in 2020. Between February and April 2020, food and beverage stores experienced a 107% increase in e-commerce sales across Canada. That has since cooled off somewhat, but to only a 68.5% increase for the 3 months ending October. By any measure, this is still exponential growth in any field.
In order to maximize on their e-commerce platform, retailers will need to quickly address the main barriers or hesitations that non-users have expressed about using online shopping tools. Whether its freshness guarantees or free delivery, quelling these concerns will be key to keeping consumers online once stores reopen their doors fully.
Recently Walmart Canada has announced its plan to invest $110 million in store renovations and technology to enhance the omnichannel experience for consumers as more and more Canadians are shopping online due to the COVID-19 pandemic. More than 130 stores are being renovated over the next few years to make new space for ecommerce including about 19 Walmart Canada did in 2020.
The investment is part of Walmart’s overall $3.5 billion investment in all aspects of the business. The hybrid locations will increase capacity in stores by giving Walmart more space. The crown jewel is Walmart’s new hybrid concept store, a relocated store in Vaughan, Ontario (670 Applewood Crescent), which is the most modern omnichannel store in its network.
This new business plan by the retail giant includes the piloting of 10 hybrid locations, where supercentres have expanded fulfillment space within their stores to escalate the speed of pickup and delivery. As well, Walmart Grocery Pickup has been expanded to about 270 stores – or 70 percent of locations.
In a recent press release by Walmart Canada, Horacio Barbeito, President and CEO, Walmart Canada said, “In these busy and challenging times, we know customers want choice and convenience more than ever. This is a very exciting time at Walmart Canada, as we invest in the business, accelerate our omnichannel efforts and make the shopping experience easy and simple for our customers.”
Alexis Lanternier, Executive Vice President eCommerce, Walmart Canada, added “The speed of change is being dictated by customer demand and we are deepening our investments in our digital footprint and omnichannel offering more than ever”.
Although retailers themselves are likely to be faced with noteworthy supply chain challenges in some markets, it will be crucial for grocers to make the switch from offline to online as seamless as possible by getting across potential issues such as stock outages, the advising of delayed delivery timelines and providing additional online navigation tools and support to first-time users on their platforms.
Companies with a strong online presence and a healthy e-commerce infrastructure and platform are currently experiencing the most revenue growth.
The businesses that offer a poor online-customer experience, or who have not prioritized their e-commerce platforms, making them as accessible and user-friendly as possible, will fail to retain their customers or attract new customers and ultimately be left behind, after the COVID dust clears.
The degree to which Canadians continue to choose e-commerce purchasing options or return to traditional brick and mortar purchasing methods has the potential to change the structure of the retail trade industry in Canada for good.
