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Opportunities and challenges in online food trade

I buy ever­ything online: clot­hing, fur­ni­tu­re, children’s toys, dia­pers, aqua­ri­um plants, wine and all other food in the past three years.

At some point, I noti­ced whilst car­ry­ing home a lap­top and hand­bag over my shoul­der and in front of me the baby car­ria­ge, in addi­ti­on to three hea­vy Rewe bags to my fourth floor flat, I rea­li­zed that some­thing was wrong. A book fits easi­ly in the hand­bag, yet I was always orde­ring it to be deli­ve­r­ed at home. Sin­ce then I buy ever­ything online: Fish, meat, fruit, vegetables.
My friend, who has not been able to walk for six mon­ths, did the same too. Soon, the older genera­ti­on will also appre­cia­te the con­ve­ni­en­ce of home delivery.
Accord­ing to a sur­vey con­duc­ted by Ernst & Young, deli­ve­ries at home with 56% and fle­xi­bi­li­ty — by not being bound to shop clo­sing times — are 47% the key fac­tors that are signi­fi­cant for online food orde­ring. 1. Not to men­ti­on the huge selec­tion of the Inter­net — spe­cial­ty food for ath­le­tes, all­er­gy suf­fe­rers, for­eign spe­cial­ties, an abundance of vegan foods. Ever­ything is online. Appro­xi­mate­ly 86% of the online offer is also pro­vi­ded by spe­cia­list retailers.2.

Market shifts in billions

The food sec­tor seems to be the last bas­ti­on in e‑commerce. If it falls, bil­li­ons will be post­po­ned. The Ger­man food mar­ket has a mar­ket volu­me of 247 bil­li­on euros (2014) and is thus the lar­gest in Europe.3 Only a few per­cen­ta­ge points that migra­te to the online busi­ness can shake old busi­ness models.

Adieu nice shopping feeling?

A sur­vey reve­als that for 83% of the inter­viewees, the lack of oppor­tu­ni­ty for see­ing, smel­ling, fee­ling is a rea­son for not buy­ing online their pro­ducts and for 56% they miss the shop­ping experience.

Nice web­sites and pic­tures of hap­py ani­mals will help litt­le in this situa­ti­on. User-friend­ly online shops and com­for­ta­ble orde­ring are requi­red as a tech­ni­cal mini­mum. The only touch­point to the cus­to­mer, whe­re the ship­per can pro­vi­de enthu­si­asm, is the packa­ge con­tent, fresh­ness / cold and pack­a­ging. The goods must not disap­point, other­wi­se the trust is immedia­te­ly lost. This occurs much fas­ter com­pa­red to when it occurs at the super­mar­ket around the cor­ner. The qua­li­ty of the pro­duct must sur­pass the expec­ta­ti­on — at least for the first customer.

The freshness must be right

Accord­ing to a sur­vey con­duc­ted by the Con­su­mer Cen­ter in Bran­den­burg, many retailers would ship ref­ri­gera­ted pro­ducts in card­board boxes and even without coo­ling ele­ments. Half of the pro­ducts would have a tem­pe­ra­tu­re “clear­ly” abo­ve the nor­mal value. This is a mas­si­ve bur­den on the cus­to­mers’ trust in the online food trade.

The use of con­trol mecha­nisms on com­pli­an­ce with the cold chain to the end user has not yet been requi­red by law. The­re­fo­re — from my expe­ri­ence cur­r­ent­ly all — sen­ders see the use of time-tem­pe­ra­tu­re labels or RFID chips use­ful. This pro­vi­des more con­trol, and could also crea­te more con­fi­dence and thus, more sales.

Packaging as marketing material

Brown card­board, Sty­ro­foam, Sty­ro­foam chips and air cushion – too much rub­bish for the ship­ment of perhaps a sin­gle din­ner. In the case of mul­ti-path sys­tems, I have to be at home during deli­very and the child­ren should not yet sleep. The slot in the evening is very tight.

It would be nice if I came home from work, the packa­ge with the ingre­dients for the din­ner would be well-coo­led in front of the door and the pack­a­ging would not upset me.

Qua­li­ty and fresh­ness are my pre­re­qui­si­tes. I do not expect anything from the pack­a­ging, except for no annoy­ing was­te dis­po­sal. Or when it comes to the worst case: a ride to the recy­cling yard.

The pack­a­ging can make the cus­to­mer a fan. Over reaching expec­ta­ti­on. Ama­zing him. Pack­a­ging is a com­mu­ni­ca­ti­on medi­um, which is ide­al for adver­ti­sing, asso­cia­ti­ons, pic­tures. Espe­cial­ly, sin­ce we never expect anything from pack­a­ging only the function.

Apart from a sus­tainab­le insu­la­ti­on, the car­ton its­elf could be smart. How about, for examp­le, a colo­ring page of dif­fe­rent vege­ta­bles and fruit for child­ren as a prin­ted image on the card­board? Or even a gui­de on how to build a house from the box.

Online ship­pers, who have swit­ched to spe­cial­ly prin­ted car­tons, say that they have been able to signi­fi­cant­ly redu­ce their returns.

It is cer­tain that bil­li­ons will shift in food busi­ness. We will go the same way as we did for shoe shop­ping. We could not ima­gi­ne sel­ling shoes online (I have to try on!) And we sud­den­ly do all of it. But whe­ther they are from Ama­zon and Co or else­whe­re. Is depen­dent on the extent to which the smal­ler dea­lers crea­te or lose con­fi­dence — with the qua­li­ty of the goods, ref­ri­gera­ti­on logistics and pack­a­ging. Per cus­to­mer, a sen­der pro­bab­ly has only one chan­ce. This one should not be gambled.

1 Ernst & Young, “Cross Chan­nel Revo­lu­ti­on in Food Tra­de”, Düs­sel­dorf / Stutt­gart, 2014.
2 EHI Retail Insti­tu­te, “Food E‑Commerce”, Colo­gne, 2015.
3 Syn­dy, “The Sta­te of Online Gro­ce­ry Retail in Euro­pe”, Ams­ter­dam, 2015.
4 Ernst & Young, “Cross­Chan­nel — Revo­lu­ti­on in Food Tra­de”, Düs­sel­dorf / Stutt­gart, 2014.