OUT THE BOX

NOW THAT’S A GOOD IDEA…FOOD BOX DELIVERY

FOOD BOX DELIVERY

NEW INSIGHT FROM CACI SUGGESTS THAT SIGNIFICANT GROWTH IN FOOD BOX DELIVERIES COULDOFFER GROWTH OPPORTUNITIES FOR LOCAL RETAILERS.

WHAT’S THE BIG IDEA?

Food Box deliveries. Online delivery and local convenience channels have fared particularly well under lockdown but local retailers haven’t yet fully embraced the growing food box delivery opportunity.

SAYS WHO?

Says Val Kirillovs of CACI, formerly of HIM. Kirillovs says the food box delivery concept is driven by three big trends in the grocery sector: a demand for convenient solutions, personalisation and being able to transact online.

IS THE CONCEPT NEW?

No, it’s been a part of the grocery channel for a while but really came into its own in 2020. A recent consumer survey by CACI suggests that in 2020 some 16.5% of respondents ordered a food delivery box and 56% of those who use food boxes order at least fortnightly. A total of 38% of those ordering food delivery boxes said one of the main reasons for doing so was to avoid going to the supermarket.

THAT’S A LOT OF PEOPLE...

Yes, and it was operators that were able to scale up the delivery infrastructure that won big in 2020, according to Kirillovs. They scooped up the initial share of the market – but competition is now intensifying as more retailers sniff the opportunity.

ARE THERE OPPORTUNITIES FOR LOCAL RETAILERS?

There is clearly come scope for growth in the convenience channel. CACI says food box delivery services are now serving a variety of consumer needs, from routine grocery top-ups, to value boxes, to unique dining-in experiences. Local retailers could easily cater to these consumer needs.

WHO’S DOING IT NOW?

2021 has already seen Morrison’s move into the space with a £30 food box offer targeting families. Booths launched its ‘Let’s Cook’ boxes and Parsley Box securing over £5.2m to expand and target baby boomers.

TIME TO GET MOVING THEN?

Kirillovs says it’s clear that food box delivery services will keep growing in importance in 2021. CACI’s recent survey found that 18% of consumers plan to use food delivery boxes more in the next 12 months while in London, a whopping 31% planned to do so.

HOW EASY IS IT TO EMBRACE THE OPPORTUNITY?

CACI highlights three specific challenges. The pandemic has undoubtably caused a surge in demand as consumers seek alternative ways of both treating themselves whilst restaurants are closed and getting groceries whilst supermarket visits are kept to a minimum.

The next 6-12 months will be crucial for companies looking to grow a loyal customer base. Kirillovs cites three main areas to focus on to drive further growth in the sector in 2021:

Laser focus on customers: Customers desire personalisation and local retailers are in a unique position where they can engage with customers and really understand what ingredients they like or dislike and manage the future interactions better.

Use the right technology to stand out and deliver intuitive customer experience: Modern solutions allow you to manage customer data in real time, analyse campaign impact and code up new customers as soon as they have made a first purchase or inquiry. Customers stumble across different parts of the journey, for example not checking out at the last moment or not finding the right product or promotion. It is important to have a tailored communication stream with those customers to convert them into the first sale while keeping the acquisition costs low and to ensure repeat purchase happens.

Keep delivery costs low and serve customers in the most effective manner: Saving money and time on the very expensive logistics side of the business will allow for great ROI and ability to direct funds to customer acquisition and loyalty building.

For more information, please contact Val Kirillovs at vkirillovs@caci.co.uk.