Most customers in India prefer to buy groceries, fruits and vegetables personally from the local market in order to get fresh items at a reasonable price. The Walmart-Flipkart deal is expected to increase customer confidence, if the new company is able to establish the ‘freshness’ quotient, provide a personal touch to the shopping experience, and showcase the ease and convenience in e-shopping through continuous and apt communication. Flipkart already has a good customer base that will be a captive audience for Walmart for groceries, whereas Walmart has to leverage its expertise in groceries.
If the Walmart-Flipkart deal can bring in technologies that can help the portals touch base with consumers on a regular basis, act as a local kirana store — allowing bargaining for price and convincing customers about the quality of products, send reminders for product purchases proactively, etc, then online grocery shopping will witness high growth. This can be undertaken by using technologies like AR or AI.
In other words, the higher the degree of interaction and personalisation in grocery e-commerce, the bigger the customer harvest. In India, the grocery and food e-commerce segment today is where large electronics or high ticket items were five years ago. This change has happened through continuous communication with consumers on product quality, return policies, bargain/ promo offers by e-commerce portals; once these were addressed, e-commerce became the preferred channel for purchasing these products. Grocery purchase will take a similar route if Walmart-Flipkart leverage their mutual strengths to erode concerns around ‘fresh’ product delivery and personalise this experience.
Currently, grocery e-commerce websites have challenges in delivering items which are ‘fresh’ in real terms. Due to delays in packing and delivering, traffic related hindrances, etc, fruits/vegetables sometimes lose their shine; the colours go pale and lose their fresh smell.
E-retailers must recognise that any food item including staples like rice or pulses is evaluated using all senses, unlike electronics or apparel. Consumers first see the colour, check the smell, and touch fruits or vegetables before deciding to purchase. Currently, no technology is available to provide this sensory experience, not even to a certain extent, if not fully. Current and future players must find a way to address this issue: either through technology or through communication to end users, to tap the potential fully.
Meanwhile, there are various offline retailers who already have a set-up for groceries, fruits and vegetables. In order to survive, they need to leverage their brand power and expertise in this business to convince consumers of the high quality of the produce. Building a delivery mechanism for fresh items is going to be the key to success. If the Walmart-Flipkart deal is a success story in the e-grocery segment, then big offline retailers’ businesses might get impacted in the long run.
Nandini Kelkar is research director, customer research practice, Frost & Sullivan