The first question we should probably answer in this lesson is...why now? eCommerce has been growing rapidly for years - so why is it only now that retailers and CPGs are placing a far greater emphasis on ‘winning’ the Digital Shelf?

Well, for starters, eCommerce is forecast to be one of the biggest drivers of grocery growth in the coming years. COVID-19 caused a major shift in consumer behavior and 2020 saw Food and Drink experience the fastest global eCommerce growth of any category. Shoppers were attracted to the safety and convenience of being able to purchase groceries online, without needing to set foot inside physical stores.

Prior to COVID, it was typically time-pressed families and digitally savvy, younger consumers who were drawn to the ease, convenience and speed of online grocery shopping. But now, businesses have been seeing an influx of new online shoppers, with many coming from outside of these two core demographics.

In response to this change, many grocery retailers like Carrefour, Tesco and Walmart have invested heavily in digital infrastructure to accelerate capacity, capability and efficiency - and this investment seems to be paying off, with many consumers expected to continue shopping for groceries online.

So, that’s the ‘why?’. The next question we need to ask is: ‘where?’. If more consumers are shopping online, where are they spending their hard-earned money? Well, there are a number of key players, with new business models coming into play at a staggering rate...

Grocery eCommerce emerged when traditional retailers gave shoppers the ability to order products online. They became what are now known as ‘bricks and clicks’ or ‘clicks and mortar’ retailers - those with a presence both online and with physical stores.

Around the same time, online-only or ‘pure play’ retailers entered the market. They didn’t have a physical store but gave consumers the ability to purchase products online and have them delivered to their door. This gave brands the opportunity to be discovered by shoppers in a whole new way. And, as the eCommerce grocery market continued to evolve, so too did the diversity of retailers and models through which CPGs could sell their products...

Consumers can now buy groceries online through third-party marketplaces like Amazon and eBay. And rapid delivery models - sometimes known as ‘Q Commerce’ - are growing in popularity, with companies like Deliveroo and Getir delivering groceries to consumers in a matter of minutes. Wholesale businesses, like Costco and Metro, are also beginning to sell their products online, and meal kit and subscription models like Hello Fresh and Blue Apron are capitalizing on consumer demand for convenience and inspiration. CPGs themselves are also getting involved, with brands like PepsiCo, Kellogg’s and Colgate all starting to sell certain products directly to consumers, bypassing traditional retailers altogether...

Understanding the Digital Shelf