Growth in online product sales forecast to continue throughout 2020
An upturn in online food sales, including confectionery and bakery resulting from the coronavirus pandemic has provided key insights into the future of the retailing within the sector, according to a leading food and drink IT specialist.
CSB-System says that the growth offers a huge opportunity for manufacturing and trade companies, and that the current crisis has merely accelerated a trend that experts have long seen coming.
As Confectionery Production has reported, confectioners have increasingly turned to online retailing to maintain sales as many smaller specialist stores have remained closed during the pandemic.
“A recent study from GlobalData has forecast that the UK online food & grocery retail market will grow by 25.5% this year,” said Timo Schaffrath, the company’s marketing & PR manager. “Nevertheless, even before coronavirus, the figure for 2020 was still an impressive 8.5%.
“Such statistics back up a pre-crisis study from Oliver Wyman consultants, who forecast a five-fold increase in online grocery sales in Germany.”
CSB says that proper planning will be essential to maximise opportunities and that rather than trying to make short-terms gains, companies should take the longer view.
“An online shop cannot, and need not, be built in a day,” pointed out Schaffrath. “To be successful from the start, it is important to have the systems in place to ensure all relevant information is correctly displayed and regularly updated, and that customers receive a fast response and prompt deliveries.”
Key to this is an adequate ERP system to act as the technical basis for the digital shopping baskets. ERP is essential because it lays the foundation for easy implementation of automatic, up-to-date agreements on prices and discounts, and product specifications such as weight and use-by dates. It also delivers vital traceability information once a product has been despatched.
Alongside this, companies need to establish a coherent and easy to navigate representation of their existing product catalogue. To achieve this effectively, CSB recommends replacing a website’s home page with the online shop. A high-quality display of products will be the most important consideration for customers, and making this the first page that they see reduces the number of clicks necessary to find what they are looking for.
Another suggestion from CSB for the successful establishment of an online shop is for companies to start with their current customer base. “Online selling will firstly provide added value to existing customers and enable a business to establish itself in the market; this is preferable to trying to attract new customers from the start, which will inevitably require substantial investment,” said Schaffrath. “Similarly, it will be more economical in the short-term to stick to the local area rather than attempting to go nationwide or global from the outset.”
He concluded: “Online shopping is fast becoming the new reality for the food sector. With the perfect integration of ERP and an online shop, companies will be off to a flying start in being able to make the best of this opportunity.”
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