When it comes to how we buy our groceries, the landscape has shifted unrecognisably over the last decade. In 2009 only 15% of us were buying groceries online whereas a decade on this has more than doubled with around 1 in 3 of us going online to shop.
This trend shows no sign of slowing down either with a report in Statista forecasting that by 2020 the UK will become the second largest online grocery market worldwide- quite a feat given the UK’s relatively small population from a global perspective.
As we see the online environment becoming increasingly important for the FMCG sector there are some interesting trends which will shape how both consumers and brands will need to navigate this space over the coming years. In this blog I’ve pulled out 5 trends being talked about in the industry press which will help shape the future of this space:
AI and digital assistants influencing shopping
AI and digital assistants such as Amazon’s Alexa and Google Assistant are becoming increasingly common household accessories and will have a direct impact on the future of ecommerce. An article published in tech crunch recently predicts voice shopping will be worth $40 billion by 2022 across the UK and US. For FMCG brands the trick is going to be working out how to take advantage of this to forge closer relationships with customers and ensuring they are available through this stream. To do this, brands that start optimizing their products for organic voice search now will have the best chance of winning market share and securing those precious repeat orders as the demand grows.
Brands finding their voice
As digital assistants become more and more widely used it’s inevitable that the manufacturers will look to monetise this. With half of all web searches expected to be conducted by voice by 2020 this is going to present a huge opportunity to reach audiences at scale. Although advertising in this territory is largely non-existent at the moment this will change. In 2017 Amazon did trial an ad by sneaking one in its morning update which was quickly removed due to the backlash from users. How exactly they will target users in the future isn’t clear, this could be a native message using the voice of the device or could be a more traditional radio ad. What is clear though is that brands will need to find a way to make themselves recognisable through audio. For FMCG brands, visual aids are important with a packshot/product shot typically being used in the creative, but with a shift towards voice shopping these brands must also find a way to stand out with audio alone.
Shoppable recipe content
One very exciting area for FMCG brands which is being talked about is shoppable recipe content. Shoppable content itself has been around for a while with brands like ASOS being excellent examples of how to utilise this effectively. The principle is very compelling for the consumer- make it easy for them to buy and keep the user journey simple! For FMCG brands the prediction is that tapping into this trend as well as the growing popularity of food/drink influencers will have a massive impact on consumer behaviour. For example a recipe video shared by a food vlogger, if shoppable, could lead a consumer to buy all of the ingredients needed from Tesco or Sainsbury’s with just one click. By leveraging this opportunity brands can become a staple part of someone does diet without the customer even having to enter the physical supermarket.
Faster delivery services
Historically customers could only really buy non-perishable, non-essential goods online given the timeframes associated with fulfilling the order and it turning up at your front door. Online shopping in the grocery space isn’t a new phenomenon by any stretch of the imagination but where the change is coming from is the speed in which companies are now able to deliver. An example of innovation in this area is Robomart, the world’s first driverless grocery store which drives around a city delivering groceries and prepared food from the retailers who lease it. To request a delivery users simply have to request it from an app in a similar vein as ordering an Uber. Techs in this area is in its infancy but over the coming years more and more of these types of propositions are undoubtedly going to spring up as consumers lean towards convenience and speed. The brands who succeed in this space will be the brands who are bold and work with the retailers to make sure they are not just on the retailers brick and mortar shelf but also on the shelves of innovations like Robomart.
Check outs checking out
Despite the growth in online shopping the bulk of grocery shopping, for now at least, is still done in store. But what will change here is the in store shopping experience, as tech innovations improve the customer experience and help retailers cut their overheads. Self-service checkouts are the first sign of automation changing the traditional in store experience but in the future some spectators see check outs being redundant altogether. A potential blue print for how this works comes from the Amazon Go store which opened in Seattle in 2018. This worked by customers tapping their mobiles on a turnstile as they walk into the store. This logged them into the store’s network and connects to their Amazon account through an app. As customers shopped, sensors and artificial intelligence tracked items customers picked up. These were then added to the virtual cart on their app and if they picked up an item they later decided they didn’t want, they could put it back on the shelf and it would be removed it from their cart. Whilst this is far from being rolled out universally anytime soon it’s an interesting concept for brands to be aware of and presents lots of exciting ways to reach customers in store, for example geo targeted mobile advertising would put a new spin on point of sale advertising by effectively allowing brands to target someone’s virtual shopping cart.
Whilst some of these predictions are still some time away from becoming commonplace, it’s clear that advancements in technology are spearheading changes in the FMCG landscape. From a brands perspective those which keep up to date with these trends and react to changes in the way customers are searching and interacting with content by putting themselves in these spaces are the ones which will win.