“In as few as five-seven years, 70% of consumers will be purchasing food and beverage online,” and spending upwards of $850 per household per year for a total of $100 billion annually by 2022 or 2024, according to the association’s and consumer research group’s new report “The Digitally Engaged Food Shopper Developing Your Omnichannel Collaboration Model.”
This is notably shorter than the prediction the duo made last year that the online food and beverage spend would not reach $100 billion until 2025.
“The pace of change and adoption has far outrun our predictions. Acquisitions, innovations and the pervasiveness of online engagement could cut the timeline by as much as half,” the groups admit in the report.
While brick-and-mortar retailers have an advantage fulfilling some consumer need states over pure-play online competitors, the report reveals that they also “have serious work ahead of them if they are to hold their market share,” including developing the processes to sustain a profitable omnichannel operating model, the technology to support these processes and the staff to run everything.
“To win, manufacturers and retailers must prepare for and build people, process and technology capabilities in close collaboration to achieve six digital imperatives,” the report reveals.
Align organizational structures
The first of these imperatives is “getting the right people in place in unduplicated organizational structures,” the report suggests.
FMI and Nielsen found that many retailers and manufacturers already have people on staff with “digital transformation expertise, but these hires are rarely fully integrated into the company’s organizational structure.”
These staff members may focus on digital marketing or the company’s website, but not the overall go-to-market strategy. To remedy this, companies need “cross functional executive ownership” that can integrate staff and streamline innovation, the report suggests.
Address discrepant datasets
In addition to sufficient, well-organized staff, companies need clean, well-maintained data on which it can build its omnichannel strategies, the report notes.
“If master data is not complete, valid, unique, consistent, timely and accurate, it will be impossible to integrate different systems reliably, rendering collaboration impossible, with serious – and negative – consumer impact,” the report adds.
It explains if consumers see different information on and offline, they may lose trust in the retailer and the brand.
Forecasting inventory
Currently, many retailers use different forecasting systems for managing inventory online and offline, and often they are based on outdated systems that cannot adapt quickly to digital markets.
The report explains that brick-and-mortar stores often base forecasting on a set number of cases rather than demand, but pure play retailers use “extraordinarily precise demand estimates to stock their digital ‘shelves,’” which reduces waste and out-of-stock losses.
Retailers will need to work together and with manufacturers to create a system that optimizes delivery and inventory without cutting into margins, the report suggests.
Join shopper insights
Currently retailers and manufacturers have different shopper data, but if they combine this information to create better alignment around the consumer, they likely will secure more loyalty from shoppers, the report suggests.
To really succeed at this though, the report adds, stakeholders will need to look beyond the debate about who the shopper is in individual stores and individual categories or channels and look at the shopper as a full person that crosses each of these silos.
Improve marketing and promotions
Unlike in stores, displays do not drive increased sales in ecommerce, according to the report, which suggests instead manufacturers and retailers must work together to drive shopper engagement online, such as through social media.
For this to succeed, the customer experience “must be seamless at both the brand and banner levels online and offline,” which “will take persistent collaboration for the full marketing return benefit to be achieved,” the report found.
Create a seamless shopping experience
Finally, manufacturers and retailers that want to succeed in an omnichannel setting need to create a seamless shopping experience between physical and digital shelves, according to the report.
This means consistent pricing, product information, pack-price architecture, new product launches and other key elements, according to the report, which emphasizes in order to do this retailers will need to rethink the idea of “bricks” and “clicks,” and instead focus one fluid shopping experience.