Don't Get Left Behind Offline

Jul 30, 2020

“If you are constantly waiting for a faster train you will never leave the station.”

This article is about eCommerce. It is about shopper behavior. But mostly, it is about acceleration.

Today less than one in four independent retailers have an eCommerce solution. IGAs are slightly better but still way behind.

And yet, as we have seen during COVID-19 and even before, shoppers are increasingly looking for a digital solution to shopping.

When I was with Home Depot, we started our eCommerce efforts in 1999! That seems like prehistoric times in the digital world. Back then we were figuring out the basics—how does a cart work, how do you manage a return or in-store pickup? How do we get photos for 250,000 SKUs? And sales and profits were thin early on, as we learned how to translate in-store expertise into online results. It wasn’t easy.

Our first version of eCommerce was amazingly crude by today’s standards. So was our second, our third, and our fourth. At the time we took flack for being an early adopter. One analyst said, “You can tell the pioneers by the arrows in their backs,” referring to our nascent results online.

But we learned along the way. Today Home Depot has the largest, most complete, most successful eCommerce program in their industry. In Q1 of this year Home Depot online sales were up over 20 percent compared to low single digits for their biggest competitor.

The lesson here is clear: Jump in. Connect with your shoppers digitally. Do it now, don’t wait. And yet, when I talk to a lot of retailers, their understandable apprehension about entering the uncharted territory of eCommerce is clear. Here are the responses I get:

  1. Isn't it too late? With national chains investing millions in eCommerce, I am afraid I’ve missed the boat.
    Not so. Your local shoppers want the same high-quality products and services they get, just in digital forms. You will be excited to see how quickly loyal shoppers will switch to your solution once they find out they don’t have to shop the national chains online.
  2. My shoppers/my market aren't very sophisticated. I don’t think they really need eCommerce.
    I get this one a lot. And it couldn’t be farther from the truth. The largest growth in eCommerce grocery shopping right isn’t coming from urban technocrats, or millennials buying blueberries and kale online. It's from older Americans—our core shoppers! Industry wide, they are looking for a quicker, safer way to shop their favorite stores.
  3. I hear I won’t make any money at eCommerce. 
    While it is true that learning to shop for a customer rather than letting them shop on their own is more expensive, the other metrics on eCommerce are pretty exciting. Average basket amounts are running above $90, and the mix of products often includes higher margin items. Plus, we have seen that shoppers are perfectly willing to pay for others to shop for them. A pick-and-pack fee of $5 hasn’t slowed eCommerce sales and has actually improved margin on eCommerce sales over traditional ones for many of our retailers.
  4. There are other issues I am dealing with right now; I can’t afford to take on eCommerce, too.
    I understand this one totally. But the reality is, there are always competing priorities in retail. When has there ever been a quiet period? And though everything takes effort, launching into eCommerce right now with a modern partner like Freshop, Rosie, or others will get you operational quickly.

Online penetration is still less than 10 percent so you can launch now, catch up, and grow fast. But wait too much longer and you will miss out. Shoppers who create their first transaction with a retailer are seven times harder to switch by the time they have done their fifth transaction.

Which means shoppers are ready, they want to engage with your IGA store digitally, and they want to do it now. And no matter what happens with COVID-19, long term shoppers are speaking with their dollars that online efficiency and local quality is what they crave.

So, accelerate. Speed up. Get connected. Dialog with your shoppers digitally. It is time. 

You won’t get everything right. You will learn a lot. You will drive a bunch of shopper engagement and you will wish— promise you—that you had started a long time ago. 

Interested in getting your store up to speed with eCommerce? The good news is that launching your store into eCommerce is easier and more streamlined than ever before. Stay tuned to next week's edition of The IGA Minute to learn about the programs and partnerships available to you to help you get your eCommerce program up and running right away. 

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