With e-commerce accelerating in the food industry at record speed, it is now undeniable that a key strategy to gain market share in the grocery retail industry is through online channels. This report focuses on what strategies food manufacturers should consider to improve their ability to reach and engage with customers across multiple online channels, including DTC models, social media platforms and all-in-one apps, as shopper expectations of the digital experience increase.
Although the packaged food industry remains one of the FMCG industries with the smallest penetration of e-commerce, the channel has skyrocketed during 2020 and has reinforced the need to prioritise online strategies to succeed in an increasingly digital world. This together with the incredibly tech-savvy generations of Gen Z and Millennials, food brands and retailers alike need to find ways to meet this demand.
Food manufacturers need to focus on a multichannel strategy to improve their ability to reach and engage with customers as shopper expectations of the digital experience increase.New business models are crucial to achieve this so customers are able to interact with a brand or a service provider wherever they may be. Strong focus should go into the smartphone as a key path to purchase in the food and drinks space as well as curating the most adequate price strategies and product assortment, paying attention to the product features that can differentiate a product from the competition in the online environment.
New emerging models such as direct-to-consumer or subscriptions can help to build consumer loyalty. The creation of these platforms by brands enables them to get customer information in real time, which is crucial to understand what are consumers’ preferences, personalising the communication and allowing brands to react with their innovations.New commerce ecosystems such as social media platforms and all-in-one apps are also becoming incredibly powerful to connect with and engage consumers.
By leveraging the vast amount of data collected through online channels, food players can offer more personalised products and services, for example, targeting food allergies or helping consumers transition to a plant-based diet by providing personalised offerings and meal-planning tools. On the flip side, competition is intensifying and should be analysed carefully as online channels offer growing potential for private label development and lines are increasingly blurring with foodservice.
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