On the Slippery Slope to Disintermediation

With purchasing and fulfillment options growing for shoppers, grocers recognize today’s need to incorporate digital experiences to capture shopper attention. These initiatives can be extremely complicated to build in-house and require a substantial investment, so retail brands must turn to third-party vendors to quickly integrate and use digital initiatives.

However, in a rush to get a project off the ground, some grocers aren’t asking themselves an important question: Am I truly choosing the right partner for my customers? Retailers who outsource the customer-facing component of the shopper journey can find themselves being disintermediated from their shoppers. Therefore, grocers must ask how they can ensure service providers are a good fit for the health of their brand and long-term business interests.

Will Your Shoppers Remain Loyal? 

A recent report by Barclays, Dissecting the Instacart Addiction, found that 43% of Instacart users indicated they would simply use Instacart with a different retailer if their preferred grocer were no longer available on Instacart. Additionally, nearly one-quarter of users identified Instacart as their preferred way to shop.

Shoppers aren’t as innately loyal as we hope them to be. This means that grocers must strive to reclaim control with authentic shopper experiences that they own—from start to finish and from store to door.

Are Partners Respecting Your Customer Data? 

All retailers seek to work with reliable partners and service providers. As the Barclays report points out, “Partnerships are very ‘attractive’; shoppers get the e-commerce options they are demanding while grocers avoid immediate capital outlays and gain time to solidify (assuming they even realize they need to) their e-commerce strategy. But in the longer term we believe partnering with Instacart creates a risk that grocers lose control of their two key relationships: with their customers and with their suppliers.”

According to Barclays, although they are working in partnership with you, some partners might be exploiting your customer data. Maintaining an experience with your shoppers can become difficult, especially if you don’t have complete control of shopper data. Your loyalty program, your ability to create personalized offers online or in print, and your ability to develop targeted digital marketing campaigns all rely on these insights. Identifying reliable and trustworthy partners that enable access and control of your brand’s data is essential to maintaining customer satisfaction and your company vision.

Illustration by Oliver Balez

Ensuring a Healthy Partner Relationship 

While some partners will take advantage of your trust in them, the same can’t be said for everyone. An ideal partner will work with you to ensure you maintain autonomy over your systems and your relationship with customers. To achieve this, grocers should consider the following:

Choose a Partner That Represents You: A partnership is about trust, transparency and thoughtful conversations about the direction that is the best fit for your business. Instead of making a quick and easy decision, pick a partner that, at the end of the day, represents you and the equity you’ve invested in terms of brand presence in the market.

One Size Doesn’t Always Fit All:  The Barclays report encourages grocers to consider, “Am I engaging a partner to cover the last mile ... or am I turning over my entire e-commerce future to another company?” While a one-size-fits-all approach sounds great, for the many reasons discussed above, this might not be a healthy way of thinking. If one vendor becomes the face and owner of your e-commerce experience, click-and-collect and grocery delivery, where does your brand have an opportunity—online and offline—to build loyalty with your shopper? Instead of simply checking the boxes with one provider, your needs may require multiple partners that excel at their craft and will work closely with you and your brand.

Own Your Own Experience and Brand: At the end of the day, it’s essential to own your experience and own your brand. Grocers’ e-commerce and brick-and-mortar channels should complement each other under their brand and label. It’s not easy to build an e-commerce experience—there are no shortcuts when it comes to keeping up with shopper expectations—but it’s necessary. Seek out a partner who embraces your brand and acts as a partner grocers and retailers can turn to maintain and improve your customers’ experience and loyalty.

As grocers rush to go digital, they risk being sold fast, easy solutions that ultimately force them to relinquish control over their online shoppers. This poses a risk to the bottom-line customer relationship and threatens success for years to come as the industry requires retailers to be entrenched in digital initiatives. When considering whom you partner with, it’s essential for grocers to take a step back and make sure they choose a partner who will respect the brand’s autonomy, customers and the DNA of the brand itself.

Sylvain Perrier is president and CEO of Mercatus