'Roles will have to change'
Jennifer Silverberg, CEO of SmartCommerce, Atlanta, said there will still be room for supermarkets to operate brick-and-mortar stores, even as online sales grow. SmartCommerce works with CPG companies to help drive the customers’ buying experience.
“Although many consumers are shifting online for convenience, it’s evident the physical retailer will always play an important role,” she said. “The grocery store will never go away, and the love triangle among consumers, brands and retailers will always endure, but the roles of [each] will have to change.”
According to a research report by Morgan Stanley, e-commerce is likely to be the method of choice for most younger shoppers. “Generally more shoppers are accustomed to buying online, including a younger, more mobile generation of consumers,” with greater potential in urban markets and among companies that offer store-pickup services.
Although buying food, especially fresh products, “remains a tactile, personal experience” for many shoppers, the report noted, “consumers once said the same about clothing, footwear and many other products they now freely buy online.”
The Walker Sands Future of Retail study said 32% of respondents indicated they would never buy groceries on Amazon. However, Amazon is the dominant online destination of choice for many consumers, with grocery sales totaling $2.1 billion in 2015 — approximately 7% of the $30 billion spent for online groceries last year.
That share is likely to grow. “The prime U.S. customer — the educated, higher-income-earning woman — is a targeted demographic for many companies due to higher disposable income, [and] Amazon has captured that demographic,” said Scott Mushkin, an analyst with Wolfe Research, New York. “As Amazon continues to increase the value of its membership through offerings such as streaming entertainment, for example, the company will drive higher share-of-wallet through its offerings, [which] suggests the company’s dominance of e-commerce is only likely to grow.”
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