The math is simple: as inflation strikes most of the Western Hemisphere, consumers will save their money for basic needs and cut on more expensive non-essentials. Ordering hot food for immediate consumption had become a staple among everyday pandemic rituals, as going to the supermarket was perceived as uncomfortable or even dangerous.
This, in turn, brought a spike in funding for quick commerce startups that promised grocery at home in 15 minutes and for food delivery companies who crowdsourced their deliveries. When the pandemic subsided the effect on these hard-to-sustain models soon appeared to be devastating, with widespread losses on valuation and many young startups closing doors.
The back-to-normal effect also had some unforeseen repercussions. As business strategist Brittain Ladd remarked on LinkedIn a few days ago: “Amazon simply hired too many people as they misjudged what would happen after the pandemic. I am incredulous that Amazon’s vaunted team of economists failed to understand that when the pandemic ended, consumers would revert back to their behaviours and online sales would fall”. Result: Amazon will fire up to 18.000 employees and, according to Ladd, may even consider divesting Whole Foods.
It is true that many consumers reverted back to their pre-pandemic habits and that most of them have to be more economically conscious than before, but there are silver linings.
As reported on PYMINTS: “the supermarket value proposition — to meet shoppers’ essential daily food needs at far lower prices than restaurants — is all the more appealing to cash-strapped customers”. Inflation has also caused shoppers to focus on groceries, rather than prepared food: they go back to stores, in search of bargains.
What about grocery delivery? No fears there, people still want it. “Shoppers have a high level of concern about their overall ability to afford everyday essentials like groceries, so I think because of that you’re going to see more of a focus on groceries across other channels beyond just traditional supermarkets”: says Rachel Dalton, head of retail insights at data analytics firm Kantar.
According to Grocery Dive, grocery e-commerce will remain prominent but with a different growth trajectory. What does that mean? It means that maybe it’s not going to skyrocket as it did in 2021 and 2022, but will become much more focused on providing good, flexible pricing and a superior customer experience, since those who shop online will do that not out of panic but because they simply prefer it.
A sensitive consumer, who shops for convenience with a sustainable approach, is not eager to pay up to 30% more on his orders by choosing options like Instacart (which has slashed internal valuation by 20%). He/she will pick an online supermarket offering adequate prices for adequate and variegate delivery options, according to pockets and time constraints.
This is why Milkman Home Delivery Platform for Grocers has been designed to exceed Shoppers’ expectations by offering advanced and sustainable delivery options of day/time of choice, full visibility of the order journey, and a real promise to delivery based on trust and reliability.
