Groceries are a ubiquitous commodity for consumers and a highly competitive industry for grocery providers. While the need to buy groceries is virtually universal, it is a chore that many people may not look forward to doing, or may have difficulty performing because of physical or transportation limitations. The most common method for acquiring groceries requires consumers to physically go to the Grocery Stores Santa Monica, walk up and down the aisles gathering the items needed and proceeding to the checkout line. The use of the Internet for online grocery ordering has introduced another option for consumers that will eliminate the need to push a cart through the store, and if home delivery is used, will eliminate the trip to the store as well. However, the first generation of online grocers has overcome numerous challenges, including extending the supply chain from existing stores to customer homes and changing customer behavior to embrace a new form of shopping.
The Internet is increasingly becoming a medium that is utilized by a wide range of service providers in an attempt to increase efficiency and reduce costs while also maintaining a high level of quality in their customer facing operations. Firms can properly leverage assets to ensure efficient operations and the ‘right’ kind of customer experience if they have a clear understanding of the needs and priorities of their customer base, which includes why customers use the online ordering channel (and the customers’ satisfaction with the goods and service they receive. Ultimately, the ability of an online retailer to fulfill customer needs will affect the amount of the consumers’ shopping dollars or ‘wallet’ that will be spent with a given supplier.
The Grocery Stores Santa Monica operates in an environment that is especially challenging with exceptionally low profit margins of 1 to 2% thousands of items per retail outlet and intense price competition. This challenging environment puts grocers under extreme pressure to capture more market share, especially of those customers who will be more loyal to a single grocer. This is particularly true for grocers who offer online ordering where the cost to acquire a new online customer may be 5 to 20 times the gross margins achieved per order placed. This means that online grocers need to capture customers and then keep them satisfied so that they will purchase enough goods to allow the grocer to recoup their recruitment costs, which will usually require multiple customer orders. Given the high cost of recruiting a new online customer compared to the gross profit margin per order, it is imperative that grocers serving this market niche have a good understanding of what drives online customer satisfaction so that customers who try this service will continue to use it, and eventually spend more using this channel.