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E-commerce Will Require Solutions Over Products

Convenience is a key driver of ecommerce growth in food and beverage, which means marketers must reimagine their products as solutions. The world is becoming more focused on the experience of using products, rather than focusing on owning products. Food and beverage marketers need to shift to being part of food delivery solutions, as opposed to offering products alone, if they are to remain relevant in this shifting retail environment.

We can turn to other industries’ success stories for guidance. A few common threads emerge, all related to what can be done for the consumer.

Carry it for me

Big and bulky items are more likely to be purchased online than through other channels. For example, in the toys sector, 16 percent of brick-and-mortar sales are large outdoor toys, while 22 percent of online orders come from this category. This eliminates a trip to a retailer and provides the convenience of not having to carry a large item home from the store.

Think for me

Subscriptions based on consumers’ pre-defined preferences take out the guess work. Companies like Birchbox send consumers custom-curated beauty products each month as a way to remove the guess work – no longer do beauty consumers need to sort through thousands of potential products.

Restock for me

Companies like the Dollar Shave Club offer convenience by sending customers the products they use all the time to their homes, eliminating the need to visit a store. In this case, they send razors as a way to take something off the consumer’s to-do list.

Unpack it for me

While still in the testing stages, both Amazon and Walmart are testing services where the consumer grants them access to their homes. Delivery personnel can place items in their kitchens, refrigerators, or other pre-determined locations.

While food and beverage isn’t as far along the e-commerce path as other industries, there are clear signs the industry is at a tipping point and should learn from other sectors. With 4 percent of grocery dollars going online, this industry is clearly overshadowed by the likes of consumer technology, in which 30 percent of its dollar sales go through online channels. However, in recent years, retailers in grocery have begun to solve the challenges that prevent consumers from purchasing food online. Just under half of consumers say it’s faster to go to the brick-and-mortar store, but Amazon / Whole Foods is currently test-marketing a two-hour delivery window; Target / Shipt is starting to offer same-day delivery.

Another barrier is consumers’ desire to select their own fresh items. Walmart / Jet is testing a service that allows consumers to see the actual fresh foods online before they’re placed in the cart. The ever-growing demand for convenience – in the way we procure our foods, combined with advances in technology – is rapidly pushing the food sector over the tipping point.

We offer an expanded view on the move to e-commerce for the food and beverage industry. Email darren.seifer@npd.com to learn more about the lessons we’ve learned from other industry sectors.

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