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Rise of the online grocery stores

Online groceries are beginning to find traction in the UAE with consumers used to the benefits of delivery and ease of ordering.

 

Aftab still remembers his weekly trips to the supermarket with his father for their household grocery needs. He would get to roll the trolley around various aisles while his father would pick out the things on the list. If he got lucky, he would get a chocolate bar or his favorite cereal on the way out, and the journey back home would be a happy one. But this memory, besides being a nostalgic one, also reminds him of the tediousness of it all and how on many occasions his father would crib about the fact that they had to brave traffic and spend time in the commute, just to get their groceries. It also brings back memories of the times when they needed to visit multiple supermarkets simply because all their needed products would not be available under one roof causing them to waste additional hours.

This nostalgic and cumbersome scenario is, however, slowly fading away in today’s world, with technological advancement bringing almost everything in the palm of your hand. With the introduction of e-commerce, most of the shopping experiences have gone online. Be it clothes, shoes, electronics, or even sporting equipment, everything is just a tap or a click away. With specific target marketing and a huge network of social media, getting to the target customers is not exactly difficult for these brands. Gone are the days when your neighborhood grocer was your only hope and you had to adjust and compromise if some certain products were out of stock. “It is about not having to carry heavy items and about saving perhaps 3-4 hours of your time to spend with your friends and family every other weekend,” Nader Amiri, CEO and founder of El Grocer shares the reason that brought the idea of online grocery delivery to him.

Now is the time when the consumer is the king and all the options are sitting conveniently as apps on his phone in his pocket. Walmart Grocery Store, Costco, Sears, and others led the change from supermarkets to online grocery stores in the USA. Brands like BigBasket and Grofers, recently joined by Amazon are bringing the revolution in India. With El Grocer and Instashop entering the UAE online space a couple of years back, it is only a matter of time before this shift happens completely in the Middle East as well. “I was quite disappointed that it was easier to order either a laptop online or a burger from my favorite restaurant but I could not get my groceries. It is all about providing the convenience and saving the time when you need it the most,” says Nader. El Grocer saw its full launch in 2017 and has been picking up speed in the relatively conventional market of the UAE. Technology and convenience is something that everyone loves and prefers, be it any part of the world, and this is the reason why brands like El Grocer have been able to thrive in the nascent market of the UAE.

Most of today’s consumers have been acquainted with online shopping habits and have enjoyed the benefits of delivery and ease of ordering for quite a while now. So for online grocery, the players only needed to be present in the technological space to attract customers. “I think the whole grocery industry is at the cusp of a transformation. The industry has been relatively stagnant and competing mainly on the price for many decades, but now it is time for people to re-imagine how grocery shopping decisions are made,” explains Nader while talking about the quick changing scenario in the grocery industry.

In just less than a decade, the online grocery market has grown to more than 100s of thousands of customers placing 100s of thousands of orders with 100s of stores and brands partnering with the players to help change the landscape. Adding to Nader’s comment about the change in the shopping habits, John Tsioris, founder and CEO of InstaShop, mentions a strong reason behind this need for change by saying: “Back then I used to call the local grocery store for my order, but usually the experience was not good, with wrong products being delivered and sometimes I even never received my order. As a young professional working long hours, I wanted to avoid the haste of long supermarket lines and the traffic on the way.”

This kind of the previously prevalent state clearly uncovers the huge space to improve the service level by utilizing technology. Just within a couple of year into its existence, InstaShop is already having its business beyond the UAE borders, thanks to the need fulfillment done by improving the said service levels. With the change being apparent and remarkable in its speed and magnitude, the early adaptation begs to ask about the satisfaction level, whether the change is here to stay or just a fad? The industry’s retention rate of around 70% confirms how important and satisfying the new levels of service have been.

By partnering with the retail stores, both the parts of the grocery industry get to benefit. By facing the new challenge, stores will improve and grow further, while the online industry can provide products at the store prices courtesy of the partner retail stores by just charging a small delivery fee. “As a marketplace, all of our partners share most of their in-store offers with us. On top of that, we partner with FMCG brands to give short-term/weekly exclusive offers on El Grocer. They work like promo codes and even have themes like Back To School, Ramadan, Baby Week, etc.,” Nader shares how his platform works in tandem with the partners. John has similar functioning on his platform and goes one up by saying, “We have exclusive campaigns that we run directly in collaboration with brands, so quite often you would see deals on many products, giveaways, and competitions.”

Given this emerging trend of online delivery and the growth that is being seen, services offered by such platforms have expanded to butchery and meat products, pet care products, flowers, and even fresh produce. Talking about this intensive collaboration, Nader mentions, “I think online will help grocery retail listen more to consumers and pay more attention to shopper needs in order to provide more technology and services.” A time period witnessing such a change can be said to be an exciting age of grocery transformation. John is not far behind in piping in with his comments on the same. He says, “We are the best friend of the small neighborhood store to the big chain supermarket, by enabling brick and mortar shops to come online.”

Needless to say, the young industry of online groceries is promising a huge growth in the coming time. The bright future only means further improved services for the consumers, not only online, but offline as well. “Supermarkets can only benefit from this trend by choosing the right partner that will guide them towards the online era,” John says on the bright future that will be shared by the online and offline grocery industries. With technology spreading like wildfire, one can only imagine what the future holds, but with the guarantee of amazing things to come out of the store, quite literally.