D’MOUTH CONNECTED Dartmouth Connected By the Dart’s new column about all things internet and social media. Written by
Grocery shopping Those of you who do the weekly shop online may be surprised to learn that you’re part of a select group; online accounts for only 5% of total UK grocery spend. However, research tells us over 50% of respondents in some demographic groups are willing to buy their groceries online. so why the gap? The gap isn’t just statistical – it’s also physical. sometimes
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referred to as “the last mile”, it’s a logistical and cost issue that’s vexing businesses of all sizes, from small food & drink producers to Tesco and even the mighty Amazon. selling food & drink online should be simple and once
an order is complete, getting the products delivered to a central depot and onwards to a local hub should also be easy. But the “last mile” – getting the order to an individual household in a fit state for consumption - can add significantly to the cost, often more than the value of the goods themselves. so if you’re a consumer looking for something a bit more
‘niche’, or a small food & drink producer seeking to grow your business, what are your options? If you have the resources to handle fulfillment and
customer relations internally, you could follow the Honeybuns model (
www.honeybuns.co.uk) and add an online shop and secure payment facility to your web site. This will deliver the highest margin on sales, but may not be suitable for smaller businesses with limited resources. David & Oliver chose to outsource fulfillment and customer service, leaving them free to concentrate on the
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parts of the business where they add most value; marketing and product development. The consumer purchases directly from
www.davidandoliver.co.uk, so the full value of each sale goes to the business - but fulfillment and customer service are all handled by their wholesaler. Littlepod sell online via
littlepod.co.uk, but also list
their products on Amazon, so some of the fulfillment and customer service burden is reduced in exchange for a share of the sale price. As well as contributing to sales volumes, this approach has the added benefit of increasing brand awareness. For the foodie, the online grocery options vary depending
on where you live. For those of us in the south West the options are limited and it’s likely that, for some time, we’ll have to choose between major multiples, Amazon or buying sufficient quantities of our favourite products to outweigh the delivery charge. If however, you live in a major city, there are some
exciting developments on the horizon that could dramatically increase the online share of grocery spend and present further challenges to major multiples. Amazon Fresh appears regularly in the news but there are many interesting startups in u.s. cities that will collect groceries from your favourite suppliers and deliver them to you within hours. It’s likely that similar businesses will appear in the u.K. soon, and regional food & drink producers should be thinking now about how they are going to take advantage of the opportunities these new channels will present.
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