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E-COMMERCE REVIEW DURING COVID-19 (CONT.)


carries, and you’re looking for something to put on top of ice cream. Companies that came into this (pandemic) with strong reputations with consumers, which made them stand out, have done better in this six-month period than those with brands that are less distinctive. I’m sure that in the premium end of their deli, there’s been greater success. There’s a halo that goes with the brand.


There are two or three services that present themselves as what you might call ‘recommendation engines’. At the simplest level, a recommendation engine looks at thousands of transactions and establishes the correlation between products in those market baskets. We have a tendency to see a stronger positive relationship when peanut butter is in there to have jelly, or if a bagel is in there to have cream cheese. The new generation of recommendation engines are going quite a bit deeper in terms of coming up with several recommendations. And it results in the purchase of a product that wasn’t previously anticipated. This could be labeled as an impulse purchase. For example, in one system, the recommendations appear on the homepage, based essentially on the analysis on how the household has purchased previously with respect to taste. The history of purchases will illustrate how a household tilts one way or the other. Almost subliminally, when an item appears on the homepage, it triggers the impulse. They’ll do that on the homepage when a customer arrives, and then again on the department level and even the category level. You have that stimulation, but it’s a stimulation in a direction, sort of the way people like wine. People like certain wine varieties and flavors.


In the event that the product that’s requested is out of stock, there has to be a substitution (which can be pretty crude, unless you know what would truly be satisfactory). There are systems today that are making recommendations right there to the professional shopper going up and down the aisle. When they don’t have ‘A’, then based on the person they’re shopping for, they have a ‘B’ that’s likely to be successful.


We’ve had a substantial increase in pick-up activity at stores versus delivery. When a car triggers the system to indicate that it’s on the property, there’s a chance to send that shopper a notification that might say something like, “It’s warm out. Do you have a cold drink?” or “It’s cold out. Do you have a snack to tie you over?” Stores are using digital to make those suggestions when the substitution occurs and just ahead of the pick-up.


When you’re shopping online, you’re in a one-on-one relationship with the retailer. It’s no longer a question of who you are. They know precisely who you are.


Some of the algorithms are so good that they can take a look at what’s in your current basket and infer from that the flavor preferences, for example. It doesn’t have to be a year’s worth of history. These are examples of how the power of analytics really complement the traditional merchandising skills.


Shopping online is actually an additional shopping occasion. Sometimes shoppers want to go to the store, and other times they want to shop online. By shopping online, they’ve experienced the time- savings, the convenience, and the additional service. In the beginning (of the pandemic), it was a binary choice between the store and online. Now, the two (in-store and online) are traveling together. What’s giving the strength to online are the remarkable improvements in the shopping experience. We’re going to see more shopping online, not because of the aversion to the store, but because of the advantage of online. It’s challenging for some retailers, because they see the two competing with one another, rather than complementing each other.


WHAT’S IN STORE | 2020


© 2020 International Dairy Deli Bakery Association


Industry Landscape


DP

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