KANSAS CITY, Mo. — One of the pioneers of e-commerce and online grocery sales among independent retailers said the channel could command 30% to 40% of sales within a decade.
The trend of online grocery shopping may be similar to the momentum that brought acceptance of the credit card by retailers, Erick Taylor, president and CEO of Pyramid Foods, Rogersville, Mo., said at The Packer’s 2017 Midwest Produce Expo.
Though the retail industry resisted credit cards in the 1970s and 1980s, Taylor said once major supermarkets such as Wal-Mart began accepting credit cards, the whole industry began accepting credit cards in the 1990s.
“Can you imagine not using plastic debit or credit cards (in the supermarket)?” he said. “We are just not going to go back.”
In the same way, he said all retailers will be involved with e-commerce in the future, both with services like “click and collect” and home delivery.
With the recent announcement that Amazon’s planned purchase of Whole Foods, Taylor said there will need to be increasing digital sophistication by all retailers.
“In my mind, I think in the next 10 years, e-commerce is going to be about 30% to 40% the rest will be in the brick and mortar store,” he said.
Future trends
After his presentation, Taylor was questioned by The Packer Editor Greg Johnson about onine trends.
Independent retailers may lose a little from the center store because of online grocery sales, and the number of stores may decline, Taylor said.
Successful retailers will put greater emphasis on fresh food departments and offer shoppers a nicer experience when they visit the store, he said.
Click and collect, while less costly for retailers, may not hold the attraction for consumers as delivery to their homes.
“Our advantage as independents will be in delivery,” he said, noting that the delivery business makes up 90% of online sales in the three Pyramid stores that deliver, with 10% of business from click and collect.
Pyramid is gearing up to deliver groceries in most of southwest Missouri from selected stores. The company is relaunching its online grocery service (click and collect or delivery) to be free with a minimum order of $75 or more, with a charge of $10 for delivery and $5 for click and collect for orders below $75.
Pyramid is focused on customer service and making sure that staff collecting orders for online shoppers pick the “best of the best.”
“This isn’t about reducing shrink, it is about building loyalty (with) the consumer,” he said.