Death By A Thousand Clicks: The Internet is Killing American Groceries

It has happened in other industries from book to retail, in every city across the country, something that would have been unthinkable just few years ago: More shoppers are ditching the local stores and shopping online, particularly shopping for groceries. With brick-and-mortar stores closing at a record pace, the retail crisis is coming to American groceries- leading to a tougher outlook for the already razor-thin grocery industry.

Price Wars

For years, offering the lowest prices has drawn shoppers to be loyal to a particular grocery brand. Price wars thus have become prevalent. A store would cut prices to lure customers, then competitors would follow suit, each cutting a little more than the others, eventually pushing prices down close to the unit cost. The price wars helped consumers with overall lower prices, but led to very thin margins for grocery stores.

Falling Food Prices

Then, there is the threat of grocery prices falling fast. As food prices fall, retailers become more aggressive in trying to sell higher volumes in order to maintain revenue. It becomes a downward spiral.

Tech-savvy Millennials

Complicating the threats is the ever-changing taste and different shopping behavior of Millennials. They are raising the bar on customer expectations and personalized shopping recommendations, with the mind for best prices available and instant gratification. Millennials are doing more research online and shopping for unique health-focused brands before heading to the brick-and-mortar stores, and are going in with willingness to spend a bit more for convenience and instant gratification. Millennials define convenience in terms of service offerings such as meal suggestions, recipes, digital personalization, alert when a favorite item is on-sale, or a notification when a new product based on their diet behavior is introduced.

This seems to be a paradox: Millennials are more informed and price conscious than ever but are willing to spend more on intangible value added services such as click-and-collect and home delivery from the grocers.

It is an intimating time for a lot of the grocery stores. Groceries are everywhere and Amazon is certainly hungry for groceries. Even as the percentage of grocers offering shop online and pick up in store has increased from 15% to 23% from 2015 to 2016, there is still a shocking 77% who do not have such initiative. The significant challenge that is facing these grocers who do not yet implement an online shopping initiative is the costs of a full e-commerce solution that includes pick up in store from any store location and home delivery option. Pathover team, which is made up entirely Millennials, understand the predicaments facing the industry and has designed and developed a solution tailored to overcome these challenges.

Grocery Re-invention: Grocery 360

Pathover’s new service, called Grocery 360 (G-360), provides an end-to-end solution: G-360 builds a product catalog for a grocer, connects that catalog to customer-facing point-of-sale systems, and uses artificial intelligence to generate optimal schedules for delivering products from grocery stores to their customers. By eliminating inefficiencies in the end-to-end delivery process, Pathover only needs to charge a flat fee of $0.99 on every order. There is no set up fee, monthly subscription fee or commissions for the grocers. As a result, grocers pay less to deliver groceries, and customers pay less to receive those items; meanwhile, grocers are insulated from the complexities of building and managing an ecommerce site, manually updating the product catalog, upfront investment in delivery fleet, and payment processing. G-360 provides a simple interface for automatically creating new ecommerce sites and integration with point-of-sale systems, but G-360 is also compatible with preexisting ecommerce frameworks. Thus, if a grocer already has an ecommerce site, then integrating with G-360’s logistics (pick up and delivery) feature is easy.

Online grocery is mission-critical. But selling online is not just about taking orders through a website. To do this well takes time and attention. Stores that succeed are good at selling direct to consumers – building technology from the ground up, integrating teams skilled at navigating online marketing’s ever-shifting terrain and managing the customer experience through fulfillment and delivery. G-360 automates most of these processes and applies artificial intelligence to help grocers manage large numbers of products, recommend up-and-coming products and manage customer post-purchase experience.

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With G-360, even small or niche grocers can reach large online audiences, and compete for the loyalty of consumers who are rapidly shifting their purchasing activity from brick-and-mortar stores to the online realm.

Accuracy, efficiency and sophistication: These are all values that Pathover focuses on to help grocers leverage their e-commerce platform. Click-and-collect and grocery home delivery will continue to grow as consumers demand more convenience and now is the right time for grocers to adapt to online innovation and disruption.

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Pathover helps automate all the manual processes to save time and cost so that any supermarket in the nation can offer its own online grocery shopping and free delivery to its consumers from its own website. Stores maintain their strong store brand while being able to use similar technologies as what Amazon or Walmart have built.

Join the movement at pathover.com or contact us at partnerships@pathover.com

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