E-commerce is no longer the sole purview of entertainment, electronics, and clothing. The food and beverage industry is gradually shifting towards the online market, and the time for your business to get on board is now.
The industry is at a turning point. Innovative startups are using scalable online solutions to capitalize on shifting consumer trends. Long-standing food and beverage titans are spending billions developing e-commerce channels to realize untapped growth and remain competitive. Online grocery shopping is projected to be a $100 billion business by 2022.
Growth is happening everywhere, and your business has a unique opportunity, right now, to grab a share of it. Here are five reasons you should seriously consider making this the year your company launches an e-commerce channel.
E-commerce is the future of the industry
There are currently more than 38,500 supermarkets in the U.S., where consumers spend over $600 billion on groceries annually. Clearly, the brick-and-mortar model is in no danger. Nevertheless, a growing number of shoppers are buying food and ordering meals online. And those numbers are only going to keep growing.
There are many reasons for this, most of which come down to the modern lifestyle. Taking half an hour to drive to the store for groceries can be hard to manage with a busy schedule—a problem which the convenience of online food delivery eliminates.
The same idea extends to cooking: health-conscious consumers who want the nutritional value of a home-cooked meal but don’t have the time to prepare it themselves will happily pay online for food and have freshly-prepared meals delivered directly to their doors.
Like any other convenience, shoppers who try it quickly get used to it and spread the word. New businesses will have to factor online channels into their strategy, and existing businesses will need to add them to remain competitive.
E-commerce is an incredible opportunity
And the major players already know it.
Food and beverage giants like Mondelez, General Mills, and PepsiCo are already shifting toward e-commerce, developing new e-commerce strategies and expanding on the strategies they already have in place.
According to General Mills, e-commerce is their single fastest-growing channel, with some European markets witnessing 10% of food sales happening online already. In 2015, PepsiCo appointed Gibu Thomas as their new general manager of e-commerce—the former senior vice president of mobile and digital strategy at Walmart, who helped that company grow into a $12.1 billion retailer online. Indra Nooyi, PepsiCo’s CEO, has said that food and beverage e-commerce is the “next great revolution” in the industry.
At the same time, smaller companies and start-ups, particularly in sectors like specialty food and beverage, are innovating, meeting consumer trends, and responding to an increasing demand for online channels, thereby allowing them to claim a growing portion of the market share. Just in the case of specialty food and beverage, e-commerce accounts for 36% of all sales in both direct-to-consumer and B2B markets.
E-commerce is what consumers expect
The fundamental reason why e-commerce does so well in every industry is that shopping online is simple, convenient, and saves time and money for businesses and consumers alike.
On the consumer level, modern shoppers overall tend to research their purchases, and this extends to buying food online. For instance, e-commerce allows the customer to compare prices and use find-a-store features to locate the nearest restaurant or grocery.
But more and more, consumers also want to know about nutritional value, ethical sourcing, sustainability, the living conditions and treatment of livestock, and so on. These issues obviously go right up the chain to the B2B level, from producers and suppliers to catering services.
Food and beverage e-commerce businesses are positioned to put all this information at shoppers’ fingertips with a click and thus influence their buying decisions, while well-planned search engine optimization gives you the opportunity to rank for key search terms, drive traffic to your site, and establish yourself as a go-to source for what consumers want.
E-commerce helps you stand out
In a marketplace where shoppers are overwhelmed with choice, standing out from the competition and differentiating your brand are critical to success in the industry.
New companies face obvious struggles on this front, but at the same time, their small size gives them the agility to adapt and respond to changing consumer trends more quickly than larger, more well-established brands with long product development and testing cycles. For their part, the larger companies need to transform their business model, both to keep their existing market position and win new clientele.
This is why Ben Rudman, director at SDR Ventures, calls competitive differentiation the biggest challenge facing food and beverage.
E-commerce channels make it much easier for companies to carve out their mark and define their brand. Going well beyond the products and services offered, the right e-commerce solution allows businesses to craft and hone the user experience of their online shoppers. It lets you connect with and respond to your client base through social media, promote brand recognition, and ultimately foster customer loyalty.
The bottom line is, 64% of companies who succeed across the industry are already employing an e-commerce for food and beverage strategy, and the numbers are climbing. If you do not take advantage of the opportunity for differentiation and growth, your competitor will.
E-commerce is easier than ever
Even if you’re completely new to e-commerce, opening an efficient, profitable online channel built to industry best practices is easier than it’s ever been. By choosing an ERP-integrated e-commerce solution, you can actually automate key business operations like order processing and inventory management, optimize your supply chains and shipping logistics, and minimize turnaround.
ERP integration works by synchronizing the data stored in your ERP with the data stored in your web store. When orders are placed in your store, they transfer directly to the ERP for fulfillment, and the invoice transfers back to the web store. Both systems share customer, inventory, and price information in real time, ensuring speed and accuracy and eliminating human error.
With a smart choice of e-commerce platform, you will be able to create a distinctive and rewarding customer experience with a media-rich product offering, intuitive navigation, and robust search capabilities. You can connect with B2B and B2C shoppers alike, learn their behavior, and deepen the customer relationship with personalized promotions and pricing.
If you’re ready to learn more about the growth potential a food and beverage e-commerce strategy can offer your business, give us a call for an ROI assessment of your company’s project by one of our experts.