Machiel Reinders is a senior researcher of Marketing & Consumer Behaviour at LEI Wageningen University Research Centre. He is currently focusing on trends in the agrifood market, in which capacity he is also involved in the Fresh ONLINE Pack project. In the previous years, Reinders mapped out the existing situation and the situation that is desirable in the future with respect to the online sale of fresh produce.
This study included a mystery shopping experiment, in which products, packaging and the ordering procedure of various online sellers of fruit and vegetables were tested. ‘The study revealed that there were substantial differences not only with regard to the ordering and delivery processes, but also in respect of the product ranges, delivery frequencies, packaging and the payment methods offered.’
Critical success factors
What requirements would you need to satisfy if you wish to be successful in the online sale of fresh produce? According to Reinders, one of the biggest obstacles is logistics. How can you be sure that your fresh products will be delivered on time and in the desired manner, and in a way that is profitable to you? Door-to-door delivery is expensive, particularly when your customers have individual wishes with regard to delivery and are only willing to pay limited delivery costs.
A study conducted by Deloitte in 2015 reveals that consumers increasingly want to pick up their own groceries.
There are a few ways to keep these costs down, according to the researcher: ‘If you opt for home delivery, you can limit yourself to a specific delivery radius or ‘pick’ your orders in a decentralised manner, like at the local supermarket or greengrocer’s. Another alternative is to use pick-up points at supermarkets or community centres. The study conducted by Deloitte in 2015 reveals that consumers increasingly want to pick up their own groceries. The most important reason for this the ability to pick up your groceries when it’s most convenient to you.’
Speed and convenience
Reinders believes that opportunities abound in an online environment. Groceries can be put together according to individual specifications, or linked to a personal profile, such as a specific diet. An online environment can also offer consumers inspiration, in the form of videos, for example. Platforms like these also enable information to be shared via social media. ‘Online channels offer the ultimate in speed and convenience.’
The researcher also believes that online sales offer opportunities in the field of freshness and quality. ‘Supplying products of a consistently high quality and responding to the demands of target groups could make it easier to achieve higher profit margins. Differentiation in products range and delivery methods are also opportunities that could be explored. Also, differentiation raises efficiency in the chain: food waste can be reduced and chains shortened.’
An online environment offers opportunities for demand-driven innovation and marketing, because it is easier to gain insight into the behaviour and wishes of customers who order their products online.
According to Reinders an online environment also offers opportunities for demand-driven innovation and marketing, because it is easier to gain insight into the behaviour and wishes of customers who order their products online. ‘This will provide an incentive for new products or concepts to be developed based on customers’ prior ordering behaviour.’
The threats facing the online sale of produce lie mainly in the fact that the Dutch fresh produce sector is still highly traditional in its commercial development, says Reinders. ‘The Netherlands is not a front runner in digital technology. Also, the online delivery of a consistent and high quality still constitutes a challenge. Moreover, many consumers believe online purchases to be more expensive. This also forms a serious threat.’
New initiatives
Reinders expects the online market to keep growing unabatedly over the next few years. ‘The ING bank anticipates the online portion of sales achieved by Dutch supermarkets to reach 15 to 20 per cent by 2020. Developments follow one another at a rapid pace; new online initiatives are mushrooming. I think that growers and suppliers responding to these developments can be assured of becoming the preferred business partners of certain sales outlets and retailers. As far as this is concerned, the sector should not let these opportunities slip by!’
Text: Tuinbouwteksten.nl/Ank van Lier. Photo: LEI Wageningen UR.
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