Tag Archives: e-commerce

Rick Williams, JPG Resources
FST Soapbox

COVID-19: The Impact on 2020 and Beyond

By Rick Williams
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Rick Williams, JPG Resources

COVID-19 has had a major impact on the food and beverage industry this year, contributing to everything from bare shelves and supply chain issues to changes in consumer behavior to plant shutdowns, and to historic grocery cost spikes. We continue to experience changes every day, along with challenges that must be overcome. Lessons from the last year can prepare us for the years ahead, but only if we learn to adapt and anticipate.

Nearly all parts of the supply chain have been impacted, from raw material sourcing and packaging shortages to manufacturing plant shutdowns to logistics capacity to bricks and mortar store operations to consumers. At the onset of the pandemic, major industry trade shows were cancelled and postponed, along with demos and in-person sales meetings, leaving the future of shelf resets with a dark cloud hanging above them. Staying in touch virtually with buyers and providing updates proved to be a best practice and will continue into 2021.

To keep things running smoothly on the manufacturing side, assets from some logistics providers were redeployed to where they were needed most, and with consumers dining more from home, the industry saw a huge move from food service to retail, which we will touch on a bit later. Moving into 2021, brands should ensure their raw materials and supply inventories, especially those that are imported, can cover any potential and unforeseen disruptions. It is critical to prepare well in advance of shortages or surges, specifically in at-risk chains.

Despite the attempts to mitigate against shortages, even the most well-known brands faced major out-of-stock issues and consumers turned to alternative, smaller brands. The shortages came from an increase in pressure from consumers stocking up on items, not from a lack of supply as many believed. Manufacturers increased hours and scheduled capacity on production lines to maximize efficiencies to keep up until things returned to normal. When possible, production lines were reconfigured to distance operators and shifts staggered to limit contact between teams. Senators even introduced the Food Supply Protection Act to help strengthen the chain, protect workers and reduce waste, as per the United States Senate Committee on Agriculture, Nutrition and Forestry. Despite these efforts to keep shelves stocked, the unprecedented time presented smaller brands the opportunity to gain new loyal customers. The transition to e-commerce became an avenue for increased exposure for brands and continues to prove to be a vital option to explore if they have not already.

The retail sector made major headlines this year. In an effort to avoid crowds and follow stay-at-home orders, many consumers began shifting their purchasing behaviors. With today’s technology, it has been easier than ever to shop via e-commerce platforms, whether grocery pickup, delivery or takeout. We experienced temporary out-of-stocks at brick-and-mortar stores and increased wait times on deliveries due to fulfillment shortages. Consumer reaction to these changes—including stocking up on staple products such as paper towels and toilet paper—caused spikes in grocery costs. April saw the largest monthly increase in food at home indexes since February 1974, according to the U.S. Bureau of Labor Statistics.

Food service has not been exempt from the impact of 2020. With less dining out and more eating at home, restaurants, bars, college cafeterias and stadiums have had to adapt with major shifts in business operations, traffic and income, and practically hit a standstill. In September, the National Restaurant Association reported that nearly one in six restaurants, or about 100,000 nationwide had closed permanently due to the pandemic. Restaurant management had to amend all aspects of operations, including their takeout procedures and other established programs.

In order to survive, restaurants have been creative, building welcoming and distanced environments, and delivering new services to diners. The use of technology will play an even bigger role, now more than ever, to limit touch points. QR codes for menus and contactless ordering and payment options will become the new norm for establishments, if they have not already. Going into 2021, some restaurants are even revamping menus and finding ways to turn them into CPG products, a new trend that is sure to take off in the new year. In April Shake Shack announced a ShackBurger Kit, complete with all the ingredients necessary to cook the chain’s signature burgers using the same ingredients as the dine-in experience, but from the comfort of home. More recently, in November, Chipotle introduced its first digital-only restaurant, which will handle only pickup and delivery orders. Many local restaurants have adopted new best practices to serve their patrons and stay in business. When in-person dining was suspended in the spring, one of our favorite neighborhood restaurants began offering takeout for the first time. Initially, they required patrons to come in the restaurant to sign their ticket and pick up their order. They evolved into a totally online ordering and payment process, including tip, and masked touchless curbside pickup. They have continued this even as in-person dining resumed. We can expect to see more tactics like these, loyalty programs and digitized experiences in the coming year.

It is impossible to be certain what 2021 will bring, but what we do know is that it will require proactive planning and preparation. Learning from 2020 will play a pivotal role in survival for some brands, companies and establishments, and mitigating against breaks in the supply chain until we return to a sense of normalcy. The good news is the food supply chain has proven to be very robust and resilient. How we react to changes in the next few months is critical to maintaining a strong and secure supply chain to ensure we continue smooth operations.

Mike Owen
Retail Food Safety Forum

The Changing Psychology of Grocery Shoppers

By Mike Owen
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Mike Owen

The grocery sector has always been the bedrock of traditional brick-and-mortar retail, and it is no surprise why. How many people have wanted to check first-hand the ripeness of a tomato or how fresh the lettuce looks? The up-front examination is everything.

However, the COVID-19 pandemic has accelerated a change in the psychology of grocery shoppers. Health guidelines that have encouraged lockdown and working from home have focused the mind of many people on health consciousness with a need to keep financial stability in the throes of unemployment or furlough. Purse strings are tightened, more home cooking and fewer luxuries mean there is no longer a need to buy specialty products when basic provisions can be met at home.

Home Is the HQ

Staying at home has meant larger purchase sizes, which has led to fewer trips to the supermarket, bigger basket/cart size when you get there and an increase in private label purchases. People have also become more conscious of what they are putting in their bodies.

Social distancing has made many consumers resort to online grocery shopping. As long as there is availability, at a right price and an efficient delivery time, consumers are prepared to forego their normal habits for the sake of convenience and time saving. There is also no denying the surge in online purchasing for groceries during the pandemic. Interestingly, the market has seen an exponential increase in conversion in the over-50 age group—a group that may have ordinarily resisted this activity.

Health Concerns Sway More People to Shop Online, Regardless of the Product

According to Accenture, there is expected to be a 160% increase in e-commerce purchases from new and low frequency users. The vast majority of consumers who have increased their use of digital and omnichannel services, such as home delivery, curb-side pickup or shopping via social media platforms, expect to sustain these activities into the future.

The Wunderman Thompson Future Shopper Report 2020 highlights that online shopping—and shopping on Amazon in particular—is a popular choice across most industry sectors (including health and pharmaceutical, entertainment and toys); 30% of those purchasing luxury products and 40% of those buying groceries would never buy these products online. But with lockdown measures still firmly in place for most countries, consumer resolve is likely to be tested, and loyalty to physical stores continues to wane.

Consumers are taking stock of their own concerns in terms of home cooking and shopping for local produce and the process for reducing food waste. They are also taking more time to decide what they will need for food or grocery items, and it is likely that many choices will be made before consumers enter the supermarket, as much of the research is done online for product information.

Research undertaken by Bazaarvoice revealed a 21% increase in online orders in March 2020 versus March 2019, with 41% of respondents stating that they were currently shopping online for things they would ordinarily shop for in-store. By April, they were spending more time and making more purchases online, which pushed groceries out of the number one essential category. This may have been due to people getting used to spending longer periods of time at home, moving past the essential necessity phase, and as a result, product shortages have eased, and different product categories are being prioritized.

Changing Expectations for Greater Online Grocery Shopping Experiences

Every generations’ lives and shopping behaviors are now intertwined with digital commerce. They are driven even more strongly by factors such as range, ease, speed and convenience. Online grocery shopping—both delivery and pickup—is cheaper, reducing the number of trips that keeps shoppers out of stores, where personnel are also at serious risk of infection.

And for retailers, inserting a row of fresh vegetables on websites such as Walmart Grocery or Amazon Fresh to the same grid style as they use to sell laptops or smartphone cases can look clinical and confusing to consumers. Food shoppers want to touch the tomatoes. Slicing the grocery store up into individual, pixelated goods doesn’t feel like grocery shopping anymore.

Relevant Accurate Product Information Is the Key

In an article in The Atlantic, Bryan Leach, CEO of shopping promotions company IBotta, predicts: “Shoppers won’t lose the ability to manipulate the avocados, pick something up on short notice, or just browse aimlessly for meal inspiration”. Retailers will have to up their game to provide improved customer experience in product presentation and selection.

Some online grocery retailers are already providing online menus and the ingredients to cook for specific meals. Internet-grocery fetchers might come to be seen more as the small shopkeepers of the turn of the century, or the community-supported agriculture services that deliver fresh, local goods or provide specialized groceries or services.

By serving optimal E-commerce sites that provide specialized product information either through chatbots, specialized product range and knowledgeable staff will further enhance the experience and value.

Some companies such as Fortuitas and Javelin Group are supporting retail brands to provide more accurate product information to their E-commerce websites with the help of product information management systems. The provision of consistent data in an omnichannel environment means that up-to-date product knowledge and availability can be accessible on an on-going basis leading to better trust and online sales.

While access to marketplaces such as Google, Amazon Fresh and Ocado continues to grow for grocery products during the pandemic, some marketplaces have defined the following tactics to keep customers engaged through the use of product information.

1. Prevent Panic Buying With Product Badging

Brands can bring more responsibility to the shopping process on marketplaces like Amazon, Google and online retailer web catalogues by using product information to discourage panic buying through the addition of social cues. These can have a big impact on how customers view brands and products. Through this product badging, where, for example, you limit the purchase of essential products per user, consumers can shop more responsibly and feel more in touch with the brand as a ‘caring’ provider.

2. Promote Stay at Home

Offer a unique opportunity to improve customer experiences by promoting product categories that are most popular at a given time. Stay at home and work from home lifestyles are presenting new and unique requirements for users. There is a need to create relevant product categories designed for work from home and promote them on your website.

3. Back-in-Stock Notifications/Recommendations for Similar Products

Creating a landing page with relevant recommendations for similar products that other users have purchased can serve as a way to improve customer experience on your website.

There is no doubt that COVID-19 has changed the grocery purchasing mentality for purchasers, and it is likely to develop further during the pandemic. It is whether many of these habits are likely to remain post-COVID? What is certain is that increasing accuracy of product information will be key to a continued growth for sales both online and in-store.

FDA

FDA Expects to Release Blueprint for New Era of Smarter Food Safety Soon

By Food Safety Tech Staff
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FDA

On October 1, Frank Yiannas will be the keynote speaker for the 2020 Food Safety Consortium Virtual Series || The series takes place during the weeks of September 3 through December 17Expect the much-anticipated blueprint for FDA’s New Era of Food Safetyto be released soon. The agency has not provided an exact date but in an update prior to the July 4th holiday, FDA stated it would be rolled it out “in the coming weeks”.

“The challenges we’ve faced during the pandemic have made it clear that the goals we set forth in the New Era blueprint are more important now than ever. Some of them, like enhanced traceability, are particularly meaningful in light of recent events,” Frank Yiannas, FDA’s Deputy Commissioner for Food Policy and Response, stated in an agency consumer update. “What we have learned from the pandemic is that we’re on the right track with the New Era of Smarter Food Safety. The steps that we’ll take will prepare us to protect the safety of our food supply, no matter what challenges we face.”

In addition to the focus on emerging digital technologies, traceability in the supply chain, ensuring safety in the home delivery of food (e-commerce), and food safety culture, FDA will be including the lessons learned from the COVID-19 pandemic as part of the blueprint structure.

Target, Kroger

Rumor Mill: Target and Kroger Talk Merger

By Food Safety Tech Staff
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Target, Kroger

Rumor has it that Target and Kroger are talking about a merger. Citing unnamed sources, an article by Fast Company reports that the companies started discussing the prospect last summer, as the deal would be a boost to Target’s grocery business, while Kroger would reap the benefits of more merchandise and e-commerce.

However, CNBC is reporting that the two companies are not in talks to merge but rather are discussing Target’s acquisition of Shipt, a same-day delivery company, which occurred in December.

Fake news

Find the fake news: This article is part of the Food Safety Tech April Fool’s edition. To find out which stories are fake and which are real, log onto our site on Monday afternoon (April 2) and click on each story for the update.You can also sound off in the comments section.

Think this is the fake news? Wrong! Here’s our April Fool’s story.

New Handheld Scanner Detects Pathogens, Puts Curators at Ease

 

Amazon Fresh

Amazon to Grab Grocery Business, May Open Stores

By Food Safety Tech Staff
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Amazon Fresh

Amazon may have plans to expand its grocery delivery service into convenience stores. According to The Wall Street Journal, the retailer may open convenience stores and offer curbside pickup to Amazon Fresh customers (the online grocery delivery service). Amazon Fresh currently offers traditional grocery items such as packaged goods, beverages, condiments, baking goods, seasonings and pasta, along with perishable items such as cheese, eggs, frozen foods, and meat and seafood to consumers in certain cities. Based on location, consumers would also be able to order items from local retailers. Through the new reported expansion, Amazon Fresh customers would order shorter shelf life food items via their mobile devices for in-store pick up, and items with a longer shelf life would be available for online order and delivery. It’s possible that Amazon will open one of these locations in Seattle within the next few weeks, according to the Journal.