In the last few years, e-commerce has seen tremendous growth throughout the world. According to a 2020 study by Euromonitor International, which was also published by the Government of Canada, the e-commerce market for packaged foods has boomed from 149 million dollars in 2015 to almost 1.6 billion dollars in 2020. The historic rate of annual growth was 59.1%. The non-alcoholic beverage sector also showed remarkable growth, with the size of its e-commerce market having grown from 203 to 596 million dollars for the same time period.
Still, the food and beverage industry in Canada has stalled in developing its e-commerce offerings in comparison to other consumer goods. Despite the unexpected bump brought about by the pandemic, in 2021, online sales of food and beverages represented only 3% of total online sales in Canada. So, why are Canadians still so hesitant to purchase food products online, given that consumers are familiar with the technology and the majority of them have access to the Internet?
Grocery Shopping: A Complex Multi-sensory Experience
As soon as we walk into a grocery store, our instinct and all our senses awaken: we see, we touch, we smell, we compare, and we imagine how each coveted food will be transformed… Then images and ideas emerge from our minds, only to be brought down to earth by the price tag. We make a decision and confirm our choice, a fluid choice, one that may change if inspired by something else on the way to the checkout counter…
You don't have to look any further to understand how difficult it is to transpose this ritual and all the reflexes attached to it in two dimensions on a screen. Ironically, even though large Canadian retailers understand this phenomenon better than anyone else, it's Amazon, not them, that holds the largest share of the online grocery market. And the same goes for the US, the UK and France.
While there are many reasons that explain why Amazon holds the number one spot, certain sensibilities of grocery consumers are not being met by the experience that Amazon is offering. It is clear that there is room for innovation and to transform a dehumanized mechanical experience into a real "multi-sensory" experience.
So, what is it that brings us back to the grocery store instead of buying our food online?
- The colourful and attractive displays of fresh products.
- The direct access to an array of options, all easy to see in the same field of vision.
- The ability to make a decision quickly when a product meets our needs (for example, allergies).
- The ability to interact with an employee to request a service, ask for help finding a product, or to simply ask them for their opinion.
- A purchasing context that fosters inspiration and spontaneous purchases.
An interesting example of this type of innovation was developed by Inabuggy. In November of 2020, they launched the first 3D virtual reality online grocery platform in Canada for McEwan Fine Foods, an upscale grocery store in Toronto.
That being said, for online grocery shopping to reach a new level, we need to think even bigger. What if buying food became human again? Think of the sounds, the smells, tasting samples, even the meeting of new people (real people, not robots!)? In 2011, Tesco, a market leader in Europe, saw tremendous success with the launch of a virtual store in a South Korean subway station. We would be willing to bet that sales would have been even higher if the smell of freshly baked bread just out of the oven had accompanied the screen showing all of the bakery items!
For their part, storefronts aren't going anywhere. They'll always be ahead of the curve in providing a real and personable food buying experience. Now that the pandemic is in the rear-view mirror, their biggest challenge will be providing consumers with a feeling of safety again, in an environment conducive to exploration and the joy of sharing a meal.