According to Business Insider, food and beverage (F&B) is the largest retail category in the US. Unfortunately, F&B is by far the least disrupted industry by e-commerce. Will this factor still remain true in the future actually?
F&B industry can no longer ignore e-commerce
There is an undeniable fact that people tend to buy such fresh groceries like F&B offline rather than online. In a survey conducted by Nielsen, up to 44% shoppers say that they prefer to purchase in-store while only 23% often purchase through e-commerce. Even in 2015, less than 1% of F&B sales occurred online.
But it is just an old story, everything is changing! A Nielsen study shows that one-quarter of shoppers order groceries online and 55% are willing to do so in the future. It is clear that once a consumer makes an online purchase, the online channel remains the favorite shopping destination. Why? Thanks to some giant firms in technology such as Amazon, Google, and eBay. They have offered same-day delivery services, which make customers get used to the convenience of ordering something online. As a result, grocery e-commerce may benefit, too. People seem to be familiar with quick click-and-collect shopping and satisfy with such convenience, even in F&B.
The figures don’t lie: most grocery shopping will still take place in real stores by 2030, but many buyers will move some part of their shopping experience online. The Food Marketing Institute and Nielsen note that innovation and widespread availability will accelerate demand, with sales hitting $100 billion within the next three years. Moreover, Business Insider estimates online grocery sales to grow at an annual growth rate of 21.1% between 2013 and 2018. Meanwhile, offline grocery sales rise by 3.1% annually during the same period.
Realizing the budding trend of online F&B selling, many F&B stores have approached e-commerce and gained success. Hence, e-commerce has been gradually penetrating into F&B industry and making this trend popularly-spread!
Why should F&B industry go online?
Both customers and F&B owners can have a lot of benefits from an online store.
Customers: “Yummy and quick!”
The biggest advantage of online ordering is that shoppers can browse virtual shopping without standing in a queue waiting and being frustrated. Even more, there is usually an online assistant who is ready to give such answers to their problems. Just click and collect: it is the way online stores save buyers’ time and energy!
Owners: “Make it to the top!”
E-commerce can earn F&B owners more money, you don’t know why? Let me explain. When it comes to economics, it is known that the profit is revenue minus cost. Once you want to improve profit, you need to increase revenue, or decrease cost. E-commerce, in fact, is powerful to bring you both of them.
E-commerce doesn’t cost you as much money as brick-and-mortar stores: No land lease, no store rental, no labor cost. You just have to pay for the cost of building and maintaining the website! It’s far cheaper.
Moreover, e-commerce can scale up your business: New markets with new customers. Customers who cannot come to the real store can visit it online. It can be seen that an online store reaches more people regardless of where they live and what language they speak. With carefully-invested branding, penetration into new markets, even going abroad, is just only a piece of cake!
People have tried and have succeeded. Let’s make a quick look at how awesome examples did and what they earned.
Is it difficult to bring perishables online?
F&B online stores contain such challenges for both consumers and the business side.
Challenge from logistics
The biggest difficulty of F&B e-commerce for shop owners is the complexity and high cost of logistics. The problem of calculating the estimated time and the ideal route for orders cannot be orchestrated easily. Hence, optimizing the cost of logistics is pretty challenging.
What should F&B owners consider? It’s important to examine the pros and cons of different shipping options available: home delivery, in-store pickup, deliver to a locker site, or the combination of these. Just choose the one which fits your store the most. And to optimize the cost, in fact, established online grocers have an opportunity in enterprise grocery sales, due to economies of scale, which lower costs through bulk purchases. It is a fact that volume will play a crucial role in the long-term success of F&B e-commerce, which can be supported by some current e-commerce platforms available.
Challenge from order freshness
Another challenge for F&B e-commerce, to which customers pay more attention, is the quality and freshness of orders. Customers require online grocers to not only offer a minute-by-minute shipping service but also maintain the quality of easily-damaged foods like produce, as the cherry on the cake.
Perhaps it’s the time to think about changing the packaging of orders, by using some highly-protected materials. And, again, it is the story of how to optimize the shipping route to deliver orders in the shortest time.
Why should F&B online stores choose Magento platform?
Customers choose what they want
Modern consumers don’t just want to buy a cup of milk tea, they want to choose the particular toppings, the amount of ice and sugar, and even the packaging. You can freely offer as much dishes and customization as you want because the latest Magento version can hold up to 100,000 to 200,000 products. What’s more? In the Magento platform, all user behaviors are automatically recorded. These behaviors can help you to segment consumers based on flavor profiles, pairings, preparation, occasion, and other preferences.
Create Delicious Mobile Experiences
Mobile using is such a remarkable characteristic of customer behavior more than ever. According to the report Mealtime Goes Mobile, mobile users rely on their devices research restaurants for delivery or take-out: 44% use a mobile device regularly to find restaurant phone numbers, 39% to see a restaurant’s menu, and 38% to find a restaurant location. Magento would make it work by offering built-in themes with mobile-responsive designs. No matter what device customers are holding, they can experience the most satisfying shopping journey.
Strong Business System Integration
Running an online store is not complex thanks to unique business systems, including ERP, PIM, POS, OMS, CRM, and CMS solutions using efficient web APIs. The flexible Magento framework can help F&B owners orchestrate these integrations, efficiently processing logic and routing. If you run a technique store, you need a technique system to support you controlling the store.
Smart Delivery Timing
Once again, the biggest challenge of F&B e-commerce can be solved: Delivery timing. Thanks to multiple systems and partners of Magento, shop owners are able to receive smoothly managing food and beverage order inventory and logistics. As a result, customers receive a seamless service and you can significantly boost margins.
Perhaps F&B e-commerce is still the challenge to many culinary creators, but it is such a trend which opens a lot of new markets with new customers. Now it’s showtime! Just digest more successful case studies of Magento F&B and make a quick look at essential extensions for a complete website as the cherry on the cake!