The fight for the $800 billion U.S. grocery industry has just begun. Amazon has shaken up the playing field, but traditional grocers have been slow to embrace technologies for online ordering, fulfillment, and delivery. Today online orders make up just 2% of grocery sales (in retail overall, the number is 10%). But e-commerce is quickly growing: Some analysts estimate that by 2025, 20% of grocery purchases will be made online.
What the Grocery Stores Holding Their Own Against Amazon Are Doing Right
They know how to build customer loyalty.
April 12, 2019, Updated April 18, 2019
Summary.
The U.S. grocery industry is worth $800 billion, and while Amazon/Whole Foods looms large in it, there is plenty of room for smaller grocers to thrive. The keys, the author explains, are flexibility, communication, and emotional connections with customers. Shoppers want options, especially around how and where their groceries can be delivered. They also value proactive communication from stores, including order updates and delivery status. And they want grocers to make them feel good, whether that comes from friendly employees, welcoming store layouts, or generous return policies. Companies that prioritize these three things will be positioned to succeed in the future.
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Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Strategy Planning and Execution. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
How to develop a winning strategy—and put it to work.