French multinational retailer Carrefour just announced they will be partnering with Google. This makes Carrefour the first retailer in France to partner with Google and bring consumers a new online grocery shopping experience.
Let’s face it, we’re living in a time where everything is focused on convenience making online grocery shopping a perfect fit. But just how large is the grocery ecommerce market?
According to the Food Marketing Institute, it’s expected that by 2022, consumers could be spending $100 billion dollars a year on online grocery.
Food retailers who want to grow with this latest consumer trend will need tech companies by their sides in order to keep up.
They’re going to need help with automatically replenishing products in stores, shopper subscription, artificial intelligence, voice technology and digital assistants, according to UBS analyst Daniel Ekstein.
“This is bringing together previously unlikely bedfellows,” he said. “Google has positioned itself an ally in the tech arms-race and so partnership seems a pragmatic, capital light solution to build skill and scale.”
But what’s in it for the tech companies? For starters, food is more commonly shopped for on a regular basis than other goods.
Which is why Amazon has persisted with its Fresh grocery service since 2007, even though it has had logistical challenges and slow progress in winning over customers.
According to Bernstein analysts, “Once a retailer cracks the logistics path for grocery ecommerce, it provides a high-frequency platform from which other categories can be approached. Grocery retail can therefore not be ignored.”
Something to consider for grocery ecommerce is where the food is to be delivered. Grocery delivery is more profitable in urban areas as retailers can maximize the number of orders.
In suburban or rural areas, shoppers are encouraged to collect orders for themselves from stores or curbside pick-up points.
“It is still a category that needs a lot of work. The cost of delivery needs to be brought down, infrastructure needs to be built, and shopper trust needs to be established. This will take years,” said Euromonitor analyst Tim Barrett.
Read more on grocery ecommerce at “Reuters.”