Grocery retailers in Canada are moving the competition from offline to online. The grocery market has been very competitive, with limited price inflation.
Meal kit services have appealed to an increasing number of time-pressed consumers with a variety of selected weekly recipes. The convenience of making restaurant-like dishes is the core value proposition of meal kit delivery companies.
Alcoholic drinks retailers, predominantly provincial liquor boards, have also embraced online retailing by launching e-commerce websites and mobile apps. Many of them, including LCBO and SAQ, have not only expanded the selection of products available online, but have also launched online-exclusive products or online preview and pre-order for new products.
After the success of their click-and-collect programmes, many grocery retailers identify the delivery of fresh groceries as the new growth area. As the online penetration rate increases, online groceries is expected to see growth across different age and income groups.
Customer loyalty programmes are most commonly used by grocery retailers to retain customers and encourage more frequent purchases. The large grocery retailers have all developed mobile apps to push weekly offers, as well as link loyalty cards.
Amazon leads the online grocery business with a loyal customer base, although it has not yet entered the fresh grocery segment. Amazon has a strong advantage over large Canadian grocery retailers thanks to its well-developed logistics network, which enables it to rapidly fulfil orders.
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