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Online has affected all sectors of retail including the food and drink industry. Having a bricks-and-mortar store now comes with the new challenge of not only competing with local supermarkets but also with online retailers. New research from Mintel showed that online grocery accounted for 7% of total grocery retail sales in 2018, and the forecast is that this figure will rise to 10% over the next five years. However while sales are on the up, the number of customers shopping online for groceries has in fact dropped from 48% to 45% between 2015 and 2018. The experience of shopping in-store compared to online, when done well, can be a real draw for customers. People are becoming more interested in buying quality produce, which is good news for specialists, but how do you successfully navigate the two worlds and make it work for your business?
Andrew Murray-Watson is the owner of Guzzl, a deli that opened its doors in 2017 in Brixton, stocking a range of products from smaller independent producers. The business also offers the chance to shop online but with a twist - customers can create their own hamper from a selection including spreads, teas and chocolate. Andrew explains, “As a small independent food retailer, you have to provide an online offering that is different from anything available on Amazon or one of the supermarkets. We are also not set up to logistically support the sale of small single online purchases, such as a jar of jam, so offering hampers helps us get round this issue while providing consumers with something unique in the market.
“The online store enables us to showcase the range available in the shop. It enables us to support customers in further away parts of the UK and supports our brand ethos so people who have seen us online will have an idea of what to expect within the shop.”
For retailers that have both a shop and an online service, they must be able to work together in order to benefit. Using his own experiences Andrew, gives this advice to aspiring retailers; “Independents who work hard to source genuinely innovative and fun products and provide a fantastic customer experience will continue to thrive. If you are trying to compete with supermarkets or giant online providers you may as well give up now. So you have to offer something different. That means not taking the easy option and buying from catalogues, but instead working directly with small, predominantly local suppliers. My advice for independent retailers would be to be bold, be different and do everything in your power to demonstrate the wonders of good food to your customers.”
There are those of course who have forgone the traditional bricks-and-mortar shop and delved straight into selling online. Mathew March Smith is well versed in this topic as the co-founder of Pong Cheese, an online-only retailer, which launched 10 years ago. Using his knowledge of digital media and advertising it was a “life-long love of computers” that led to him going down this route, and he cites “lower overheads, more controllable marketing strategies and more measurable customer acquisition and retention” as reasons that make “online e-retail easier and more profitable than high street retailing.”
It doesn’t come without its tests however, as he says, “The challenges for us have mostly been around growth and how to deal with volume ordering, whether it’s the storing of stock or the actual processing of bulk orders. An obvious problem of online selling is that you can’t actually limit the number of orders you can receive at once so if its two weeks before Christmas and many thousands of orders are coming in you have to have a scaled up operation, from processing an order through to customer services, that can handle all of them. At the same time if this scaledup operation isn’t scaled down in time for the quieter summer months you can run up some profit-sapping overheads.
“If there’s a challenge for us it’s growth (still), not from the impact of it but the need to keep growing our number of customers, especially those that have subscribed to our Cheese Club, our monthly subscription programme. We’ve only had it up and running for a year but it’s already been a huge success and it forms relationships with our customers that we didn’t have before.”
Incorporating the online world into your business plan is essential in order to not only survive in this tough climate, but thrive. Whether you are an online-only retailer or want to start dipping your toe into promoting your products and services on social media, learning to adapt and grow with the changing retail sector is key.