27 September, 2021

86% of retailers report dissatisfaction with profitability of online grocery sales

Louise Taylor

A new report from Wynshop and Incisiv has found that 86% of grocery retailers are dissatisfied with their online profitability. That’s despite online sales increasing fivefold between 2019 and 2020.

Tough times turning a profit

“This has long been a thorny issue for grocery retailers,” comments Northfork Co-founder Erik Wallin. “Margins within the industry are already slim, so it’s hard for retailers to make a profit on their delivery models. The increased demand for online grocery services as a result of the pandemic has made this an even greater pain point.”

Are recipes the answer?

Digital recipe shopping solutions can’t solve every issue when it comes to the profitability of online grocery retail. Indeed, picking efficiency was identified as the leading profitability lever in the Wynshop survey. However, the right recipe shopping setup can certainly help.

Northfork’s solution, for example, has been proven to drive up cart values. It lays the foundations for increased customer loyalty and spend.

Reimagining the online grocery retail experience

The seamless integration of Northfork’s technology addresses another pain point for retailers: managing third-party platforms. A staggering 92% of those who contributed to the Wynshop report found managing third-party platforms a challenge.

“That finding highlights the importance of using the right technology partner to support your digital grocery retail offering,” continues Northfork’s Erik Wallin. “We’ve seen substantially higher net promoter scores for recipe carts versus non recipe carts on the same retailer, following a really painless integration process. That really calls for all retailers to reimagine what is possible online.”

Will imagination and creativity then, backed by sound technology, be the answer to unlocking missed profitability in the online grocery retail environment? Well, the Wynshop report also reveals that 71% of retailers have not invested adequately in the digital side of their business. Perhaps if they did, they might come one step closer to solving that oh-so-tricky issue of profitability.

 

About the author

Louise Taylor


Louise is Northfork’s editor and is passionate about all things food.
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