eFood: The sale of food in online retail has been experiencing a strong boom since the start of the Corona pandemic in spring 2020. Currently, no other sector in eCommerce is growing as strongly as food retailing. According to the German industry association bevh, sales in the third quarter of last year were more than 50 percent up on the previous year. German consumers thus bought almost twice as much pasta, meat, fruit and vegetables online as they did in 2019.
eFood is considered as one of the last industries in eCommerce where there is great market potential. A billion-dollar market is emerging, and many retailers want to profit from it.
eFood: These are the challenges to sales
Not only consumer concerns, but also the high demands on logistics, clearance and delivery of goods pose serious hurdles to the sale of food on the Internet. To be competitive, eFood must demonstrate its ability to innovate vis-à-vis traditional markets. This is because brick and mortar retailing still dominates due to the very high density of the store network.
This is what you should consider in advance when selling food online
- Which business model suits me?
- Which products can be sold?
- Storage conditions of individual food products
- How do I keep cold chains?
- What (customer) service do I offer?
- Time windows for collection and delivery as well as possibilities of deliveries
- What packaging do I offer?
- Price recalculations incl. delivery costs, as well as possibilities of returns and refunds
- What user experiences do my consumers have and how can I optimize them if necessary?
- Which webshop software do I want to use?
- Software for price calculation and assortment analysis of competitors
Grocery stores carry a wide range of products, with food dominating the assortment. But these come with specific requirements when selling in eCommerce that need to be considered in advance. Groceries are offered through various options: Some are sold by weight, others by piece. In addition, the perishable nature of food requires special storage conditions throughout the supply chain. In addition, retailers must manage optimal pick and pack processes, refunds, replacement products or shipping.
According to retail expert Hemker, one of the most important challenges is a fast and efficient delivery process. In addition, the customer’s requirements are equally high online and offline: a customer-oriented assortment and compliance with ecological and social standards. The biggest challenge that has to be overcome in eFood is customer skepticism about product quality. This is because the concern that drives online shoppers is that they cannot see or touch the products before they buy them. Customers need to know in advance that their food is fresh and of high quality – no bruised fruit, no wilted lettuce, no spoiled food.
What about web design and functionality at online supermarkets?
Unfortunately, high-quality photos of products, clear labeling of prices as well as package sizes, or intelligent search algorithms are often not available at all or only inadequately.
Yet the online user experience plays an even more important role for food than for non-food. And nothing is more frustrating and tiresome than shopping on a poorly designed or poorly functioning online store. These are big hurdles to consider and overcome in the eFood sector.
eFood: The top dog in German online retailing
Experts agree that Rewe, Germany’s second-largest grocer, is the top dog in the German eFood sector. The Cologne-based company has put a lot of effort and high costs into building a nationwide delivery network. In addition, more and more stationary Rewe retailers are offering the option of ordering goods online and picking them up freshly packaged.
Edeka is also pushing into German online grocery retailing. Edeka offers a grocery delivery service in the cities of Berlin, Munich and Potsdam with the help of the Bringmeister delivery service. The company has also secured shares in the Dutch start-up Picnic.
New concepts in the eFood industry
Picnic delivers food ordered online at set times, like a modern milkman – and they do it with self-developed electric vehicles. And their success proves them right: according to the company, the number of customers rose from 60,000 to more than 160,000 last year. Picnic is currently available primarily in North Rhine-Westphalia.
“Saving is the new shopping” is the mission statement of Sirplus, a Germany-wide start-up that works to prevent food waste. Surplus food that is close to or past its best-before date is offered for sale again in the company’s own savers’ markets in Berlin as well as in the online store. The product range extends from pasta, cereals, muesli and spreads to drinks.
The delivery service Gorillas promises to deliver ordered products within ten minutes. Over 1000 products at supermarket prices can be ordered via smartphone app and delivered by bicycle courier. Currently Gorillas is available in Berlin, Cologne, Düsseldorf, Hamburg, Munich, Frankfurt, Amsterdam, Rotterdam, The Hague, Utrecht and London. In 2020, the hyped delivery service raised €36 million in Series A funding for further expansion.
Brands seek a direct line to the customer
Brand manufacturers are also jumping on the eFood train. They want direct access to customers and thus to build up a precious relationship with the target group. For example, the long-established Oetker Group bought the start-up Flaschenpost last year and paid one billion euros for it. According to industry rumors, Oetker is planning to bring pizza or other products from its range to customers’ homes via drink delivery service.
Danone launched an online store for its baby food brand Milupa in October 2020. A company spokesperson for the group justifies the move with the increasing importance for its target group: “We see that for our parents (…) digital offers are continuously becoming more important”.
eFood: Grocery with the highest growth rates
The Cologne Institute for Retail Research assumes that 3.6 percent of grocery sales will be made online by 2025. This would more than double online grocery sales once again. With the beginning of the Corona pandemic, the eFood sector is experiencing a boom, leading to increasing revenues for retailers. At the same time, this confronts retailers with unprecedented challenges.
To be successful in the fast-growing industry, a continuous market analysis is essential. To stay competitive, retailers and manufacturers need to keep an eye on the market and their ever-growing competition. Intelligent software solutions that provide valid e-commerce data help to get a sharp eye on the e-food industry and thus secure market share in the long term.
With blackbee, you are perfectly positioned in online retail – no matter what industry or language you are in. Test our software for price and competition monitoring in eCommerce now.