E-commerce vs. brick-and-mortar retail

What suits my business?

Author: Oliver Merckens

Who doesn’t want to sell food successfully in grocery retail? Should sales be pursued by means of your own web shops or should you strive for cooperation with traditional food retailers?

Spoiler alert: I consider both to be effective!

INCREASING IMPORTANCE OF ONLINE FOOD RETAILING

Even though online shopping is becoming more and more familiar to us, this is not yet reflected in the corresponding food sales. Nevertheless, there is a high dynamic in food e-commerce. In 2020 alone, sales increased by 60% vs. the previous year to approx. €3.3bn (source: HDE Online Monitor 2021). It can be assumed that this growth will continue and that consumers will increasingly benefit from this convenient shopping option.

Manufacturers have numerous advantages with their own sales channel:

With one’s own platform (shop), one can start lean and learn.
Direct contact with costumers (feedback, exchange up to product development).
The products can be presented according to one’s own specifications and equipped with all relevant information for the consumer. Of course, this also includes storytelling about the brand.
Range of products (the entire assortment including specialities or special sizes can be displayed).
By means of social media activities, basic awareness and demand can be generated in a targeted manner and with little financial effort.

Set the right points for your success!

Flexibility and speed of response are one thing but getting your own webshop up and running is hard work. Especially if it is a new brand or a new product that the consumer does not know and is therefore not looking for.

Sales and marketing in e-commerce are completely different from those in brick-and-mortar retailing. Furthermore, there is a difference between packing each package individually and supplying a central warehouse.

WHAT ARE THE ADVANTAGES OF SUPERMARKET PLACEMENT?

The advantages of bricks-and-mortar retailing for a manufacturer are obvious:

Large customer reach (daily on-site presentation of own products).
Consumers can touch, look at and taste the products (product tastings should become the normal appearance on the floor again in the post-Covid era).
As listing expands, volume increases significantly.

As before, space is usually limited and one should be able to convincingly present the relevant arguments for listing* one’s products. It can help if the product already has a basic level of awareness (see above).

Conclusion: Despite all the euphoria for e-commerce, online usually has an upper limit. If you want to scale your food business, you can’t get around the brick-and-mortar grocery stores. In the end, it’s all about being present where the consumer is.

* I will discuss the exciting topic of listing again in a separate blog post.