58|Retail News|February 2021|www.retailnews.ie
Digital Maturity
Pandemic pushes grocery retail to online high The Irish food retail/grocery sector was the big winner in an international study into digital maturity, as the Covid-19 pandemic accelerated online grocery shopping. THE rise in online grocery shopping over the course of the last year has been well documented, as the Covid-19 pandemic led to a massive growth in the numbers availing of home delivery and click-and-collect services. The numbers have been borne out by the fact that Irish food and grocery retailers enjoyed the biggest improvement in scores in the 2021 Digital Leaders in Ireland Study from management and tech consultant BearingPoint. In general, Ireland ranked bottom of the table in international comparison with six other European countries (Finland, Italy, Netherlands, Norway, Sweden and the UK), but the phenomenal rise in demand for online grocery saw the Irish food retail sector improving its digital maturity score, which quantifies the ability to serve customers through digital channels. The BearingPoint 2021 Digital Leaders study scores 390 companies (53 Irish and 337 European) representing various industry sectors on a scale ranging from ‘Failed’ (0) to ‘Outstanding’ (5). Each company in the study was measured on 239 objective criteria across four dimensions of digitalisation: digital marketing, digital product experience, eCommerce and e-customer relationship management (E-CRM). Ireland achieved an overall average score of 2.53 for digital maturity,
the lowest among the seven countries; The Netherlands topped the table with an average score of 3.00. Seven industry sectors in Ireland were assessed (Banking, Telco, Insurance, Food Retail, Energy, Media and Food Produce). Banking maintained its position for the second year in a row as the most digitally mature industry in Ireland, while Food Produce had the lowest scale score of 1.51. Scoring highly on eCommerce The Food Retail sector enjoyed the biggest rise in scores from the previous year, increasing from 2.50 to 2.73, as growing demand saw improvements in online services and impressive increases in online orders. Tesco (3.44), Dunnes (3.32) and SuperValu (3.28) are all featured within the top 10 companies in this year’s Digital Leaders Study in Ireland. The retailers scored highly on eCommerce, consistently displaying a good level of product presentation, as well as efficient purchasing processes. SuperValu also demonstrated a high level of sales support by offering services such as live chat and click-to-call. Tesco scored particularly highly on digital product experience, where it scored 4.34. Tesco exhibited a strong capability to provide customers with detailed content and company information on a well-designed website with modernised functionality, the study found. The retailer’s engaging product and store information is user-friendly, while its ability to provide a positive experience on devices, such as its mobile website, enabled Tesco Ireland to shine in an increasingly digital industry. The profitability challenge Tesco published information showing that its online sales grew by nearly 70% during the year, with a 90% uplift during the height of the first wave of lockdowns. However, the shift in channels from store to online brings with it challenges on profitability, the study warns. “Online fulfilment is typically more expensive than store fulfilment, meaning that every customer who simply switches channel erodes profit for the retailer,” according to BearingPoint, while Tesco had to more than double its delivery capability, thus adding further cost to the channel. However, the BearingPoint study argues that the boost for grocery eCommerce is likely to be permanent, so it is an area worth getting right. One definite area of improvement for each of the food retailers is E-CRM, which was the lowest scoring dimension for each of the Irish companies surveyed, while food retailers top the rankings for E-CRM in some of the other countries included in the study. “This year’s findings provide a wake-up call for Irish businesses to remind them that they must not become complacent and must continue to progress on the path to digitalisation in order to accelerate their recovery and growth, both during and post the pandemic,” noted Gillian O’Sullivan, Country Leader for BearingPoint in Ireland.
