Highlights:
- Online grocery shopping has grown rapidly since the pandemic.
- The expansion of e-commerce grocery has opened the door for shelf-stable yogurt and other dairy products.
E-Commerce and the Opportunity for Shelf Stable Yogurt
The rapid expansion of e-commerce grocery due to the pandemic has created many new challenges for grocery retailers. Learn about the new strategies retailers are using and the emerging opportunity for shelf-stable yogurt in e-commerce.
Pandemic Boosts E-Commerce Grocery Sales
The COVID-19 pandemic spurred many Americans to turn to e-commerce for the first time, especially for their essentials like food and nutritional supplements. In 2020, online grocery sales grew by 54% to reach $95.8 billion—making up 7.4% of all U.S. grocery sales.1 Many consumers opted for online ordering with curbside pickup, while others preferred the extra safety and convenience of home delivery.
Moving forward, grocery retailers understand that many consumers will not be letting go of their new e-commerce habit and the benefits it provides. In fact, 2021 is expected to be a record-breaking year (exceeding $100 billion) for online grocery sales.2 Now, it’s no longer about simply having an e-commerce option available to consumers but about securing customer loyalty, improving efficiencies, and more.
What Retailers are Focusing on Next in e-Commerce
Securing Customer Loyalty
In the highly competitive space of e-commerce, where it’s easy for customers to leave one retailer to try out another, finding ways to keep customers loyal is essential. Paid memberships like Walmart+ and Amazon’s Prime can encourage customer loyalty through benefits such as discounts and free shipping. Another approach is to improve the online shopping experience, especially through personalization such as custom wellness programs, meal planning tools, and the ability to filter searches by dietary preferences.
Boosting Sales
With their online platforms in place, some grocery retailers are now exploring the best ways to increase basket size in a digital environment, for example, through replicating the in-store experience of offering impulse items at checkout. Auto-replenishment of household staples is another strategy for boosting sales that’s particularly well-suited to e-commerce. Engaging with customers through surveys can also provide insights into potential opportunities.
Improving Efficiencies
Improving efficiencies in order fulfillment will also be key to long-term success in e-commerce. This can include investing in new operating models and information technology for managing orders and labor. Retailers may also look at having a designated space in-store for more efficient order picking or converting underperforming stores to e-commerce distribution centers (so-called “dark stores”). Many retailers are already utilizing offsite pickup lockers or kiosks (either outside or inside partner stores) as a solution to space constraints, with food safety as a critical component.
Opportunity in Shelf-Stable Dairy Staples
The continued expansion and innovation in e-commerce grocery are creating new opportunities for manufacturers. For example, some of the healthiest and most in-demand foods and beverages are simply not shelf-stable, causing special challenges for retailers during the fulfillment process. This includes staple products such as dairy—particularly yogurt, which saw rapid growth in sales last year.
As a convenient, ready-to-eat, snackable product, yogurt is also rich in protein, calcium, and probiotics, checking all the boxes for busy consumers looking to keep themselves and their families healthy. Shelf-stable yogurt and yogurt beverages can allow e-commerce retailers to meet these consumer needs. With no cooling required and no risk of spoilage, these products are perfectly suited to be stored in pickup lockers. They also eliminate temperature concerns during order fulfillment for home delivery and curbside pickup.
New Ingredient Solutions for Shelf-Stable Yogurt
New dairy technology like Glanbia Nutritionals’ patent-pending UltraHiTM Protein Yogurt Technology provides a way for manufacturers to enter the market for shelf-stable yogurt targeting a much higher level of protein than is currently possible for yogurt. UltraHiTM can be used in both spoonable and drinkable yogurt products to achieve 20-50 grams of protein per serving. Manufacturers that can offer nutritious staple foods and beverages that work for e-commerce will be poised for success going forward.
To learn more about UltraHiTM and our other dairy and plant-based protein solutions for shelf-stable yogurt, contact Glanbia.