Company Updates

Five Strategies for Grocers to Enhance their E-commerce Experience this Holiday Season

Jeanette Barlow

Jeanette Barlow

Nov 22, 2022

The holiday season is the busiest time of year for grocers and this year’s consumers are stretched thin by inflation and looming economic uncertainty. At the same time, grocers are facing increased competition from behemoths like Amazon, as well as direct-to-consumer services, restaurant delivery and ghost kitchens. In today’s economic reality, grocers need to ensure they are offering customers the greatest possible value and convenience to win loyalty and wallet share. E-commerce has become table stakes, but how can grocers ensure their online properties are prepared to meet consumer expectations and withstand holiday demand? 

Technology is critical to helping retailers succeed – and we know that grocery is a particularly complex retail category that requires a unique approach. Here are five digital strategies to implement to better serve customers this season: 

Bridge the gap between online and offline experiences 

With food at the center of most holiday celebrations, it’s even more critical for grocers to ensure their e-commerce experiences meet and exceed customer demand. According to Acosta’s Online Grocery Landscape Report, “half of U.S. shoppers are at least occasionally purchasing grocery items online,” and “more than half (57%) of online grocery shoppers say they stick with the retailers they shop in-store,” giving omnichannel grocers a significant brand loyalty advantage. The future of grocery isn’t about choosing between shopping online or in-store, we know consumers are going to do both. Grocers need to ensure both experiences are best-in-class to win. 

Through Connected Stores, grocers can now offer consumers the personalization and ease of online shopping inside their physical stores, and vice-versa, because the more consumer’s shop from a grocer – regardless of if it’s online or in-store – the more your loyalty base and overall business will grow. Bridging the gap between online and offline gives grocers a competitive advantage, especially against direct-to-consumer or digital-first competitors who lack physical stores. Connecting the in-store and online shopping experience will ensure your brand stands out amongst new competition. 

Prepare for increased fulfillment demand 

Historically, the holiday season brings an increase in customer foot traffic to the retail industry at large. According to Mckinsey & Company, holiday shopping is also happening earlier and earlier each year, with holiday spending beginning as early as October. Grocers should be prepared to meet this seasonal demand, and to do that effectively, they need to offer comprehensive e-commerce, offering consumers diverse fulfillment options. 

Today’s consumers’ needs vary from week-to-week and even day-to-day. As a grocer, you need to offer customers a variety of solutions to get what they need based on when they need it. Many customers order groceries a few days ahead of a holiday meal, but also may realize they have forgotten a key ingredient in the middle of prep – the grocer that will win is one that can serve the customer based on what they need at any given moment. We’ve seen that the same customer that shops online for “No Rush” next-day delivery, sometimes needs items in 30-minutes. And, that same customer may lean on curbside pickup for their shop when they have some time to plan ahead. According to FMI’s 2022 U.S. Grocery Shopper Trends report, “online shoppers today choose from among multiple fulfillment methods, and many use more than one. Forty-five percent (45%) of online shoppers use at least two methods,” the report found. When thinking about fulfillment, it’s critical that grocers offer consumers a variety of options, preferably using a grocery-first provider that understands the complexities of the industry. 

Customers expect reliability both online and as their order is fulfilled. They care deeply about the produce or meat selected, and they want to be able to follow along as their order is picked. Ensuring orders arrive in full and on time is crucial to keeping customers happy. With Instacart fulfillment, customers can see exactly where their order is in the process, and can live chat with shoppers as needed so they can get exactly what they need. Improving the post-checkout experience for customers will keep them at ease during what can be a slightly stressful time, especially as a host. 

Ensure consumers can get what they need online

Customers love your brand often because they know exactly what to expect. They know how to find the high-quality items they need, and – if something is out of stock – in-store associates can point them to the best alternatives. E-commerce needs to mirror the in-store predictability that customers have come to know and love and replicate it online. As a grocer, it’s crucial that your online experience helps customers easily find and buy what they need. The holidays get people out of their normal shopping routines as they look for seasonal items like canned pumpkin and eggnog, or specialty ingredients for family favorites like latkes or tamales. For grocers, that presents an opportunity to reach new customers and build loyalty with existing ones. Surfacing the relevant items – and replacements – is key during this period, as is ensuring items surfaced are in stock. 

Ensuring your online catalog reflects real-time availability to customers is a key ingredient to success. To make the most of this time, grocers should ensure their catalog is up to date and consider investing in technology tools that help monitor stock levels in real time, such as Instacart’s Out of Stock Insights. 

Because not all search is created equal, grocers should also work with technology partners that have deep experience in grocery – and whose AI models are trained specifically on grocery catalogs and data – so that search results and replacement recommendations help customers find what they’re looking for easily. During the pandemic, we have been reminded that supply chain issues can and will lead to inventory shortages. To ensure customers can always get what they need from your store, smart item replacements are key to getting customers what they need to make what they want.  

Support catering ordering online 

Inflation is impacting everyone’s wallet, and for those customers who don’t plan to cook, restaurant pricing could make ordering meals out of reach this year. The exception – of course – is grocery catering. According to a recent retail foodservice report from FMI, “half of shoppers surveyed said they want to be able to order prepared foods from supermarkets in advance and 42% said grocery delivery would compel them to choose retail over restaurant.” We work with grocers across the country who have expansive catering offerings at a fraction of the price of a restaurant or full-service catering option. As people seek alternatives to cooking this holiday season, grocers have the opportunity to expand their digital aisles to meet this specific customer need. 

And for retailers, catering often represents one of the highest-margin categories offered, driving meaningful growth for the business. In fact, grocery caterers see a huge jump in orders anywhere from five to 20 times the business they do during non-holiday periods. With this massive influx of orders, retailers need to be sure they have the right tools in place to support order management, in-store operations and fulfillment to get the most out of this season’s demand. When considering the right solution, it’s important that grocers get a comprehensive OMS – like FoodStorm – that connects to their e-commerce front-end, allows customers to order online or in-store, enables next-day or scheduled delivery and pickup and helps in-store associates fulfill efficiently.  

Bring more of the store online

While overall spending this season is expected to decrease given the current economic environment, to get ahead and spread the financial obligation customers have started their holiday shopping earlier in 2022. To capitalize on this trend, retailers should expand their online catalog and selection online. Through Instacart’s Gifts Hub, grocers can feature the best gifting options this season – from live plants or flowers for this year’s host, knick knacks for the kids table, or a festive gift box set. Offering same-day delivery will allow grocers to serve customers in a new way, helping them shop for small gifts alongside any ingredients they need for their holiday meal contributions.   

Looking ahead, many Americans are also thinking about decor for the holidays – like Christmas trees! Leveraging Instacart’s Big & Bulky fulfillment unlocks large items for same-day delivery for the first time, and grocers now have the opportunity to expand their catalog beyond the fall pumpkin selection to include trees up to 5 feet. As a grocer, this allows you to offer same-day tree delivery saving customers critical time during a typically jam packed holiday season.  

The competitive landscape has changed for grocers, but it’s never too late to enhance your consumer experience. Grocers have been central to their communities for generations – and we believe making small changes to your e-commerce strategy can make all the difference.

Jeanette Barlow

Jeanette Barlow

Jeanette Barlow joined Instacart as VP Product, Retailer Solutions in April 2022 and has spent 20+ years leading product management and strategy for the world’s leading software solutions. Jeanette was formerly the VP, Product Operations at Pegasystems where she was responsible for bringing to market innovative solutions that helped clients work smarter through a low-code application platform. Before Pegasystems, she was the VP, Product Management for IBM’s Sterling Business where she drove double digit growth for a portfolio of SaaS-based AI and blockchain offerings that solve complex supply chain problems like visibility and transparency, omnichannel order management, smart fulfillment, and frictionless supplier connectivity and management.

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