The Role of Subscription Models in the Online Grocery Market

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By Published On: December 17, 20180 Comments

According to the Founder and Director of GoodnessMe Box, Peta Shulman, the online grocery market is changing, and to survive, brands need to adapt.

Founded by Shulman in 2014, GoodnessMe Box is a health food sampling service that operates under the philosophy, ‘food with integrity.’ In the last four years, the business has sampled more than 1.5 million health and wellness products and has partnered with 600 brands to bring its monthly food subscription box to customers across the country. For her, offering a ‘try-before-you-buy’ online service is a no-brainer, as it has allowed her to leave a mark in Australia’s competitive e-commerce market.

“In many ways, it’s simply easier to shop online,” she says. “As online shopping penetration continues to increase and the demand for wholefood grows, I think we’ll see more and more consumers buying groceries with a click of their mouse. It dovetails perfectly with the Millennial mindset, as they’ve grown up using online and have very much embraced the online concept,” she continues.

GoodnessMe Box has developed a differentiated product model to engage Millennials in their digital habitat.

According to Shulman, growth in the online grocery market has also steepened competition, diversified the offerings, and increased demand for a more personalised service offering. “It started with Woolworths, the first grocer to do home delivery, and broadened to other supermarket chains like Coles and Harris Farm. Now, companies like Marley Spoon and the next derivative, Uber Eats are offering further personalisation – and that personalisation and choice resonates well with shoppers.”

With Amazon’s entry into the pantry goods category in Australia shaking up the industry, Shulman believes we’ve only just begun to scratch the surface in terms of what online retailers can accomplish in the food market.

“So far, Amazon’s entry has not had the dire consequences on general retailers as anticipated, however, it’s early days and Amazon plays a long-term game. It has upped the ante for other players and puts them on notice. In order to survive, they need to find innovative marketing strategies to compete with a powerful, strong and experienced competitor, which ultimately benefits the consumer,” she says.

“Curated products do have an edge. They appeal to a niche market of consumers who want a more tailored offering. Online delivery suggests there is a good long-term outlook for a business like us (GoodnessMe Box) selling specialised health foods. If shoppers feel Amazon’s health food range is not carefully curated when compared to its other goods, I’m not sure if it will appeal to the same kind of shoppers,” Shulman continues.

Shulman believes her health food sampling service opens customers up to purchasing new products.

For Shulman, delivering healthy food options as part of a subscription service is an easy way to keep consumers excited about their health and wellness goals, while also differentiating her grocery offering from other players in the Australian sector.

“The consumer mindset has made it a ripe environment for value-added food delivery boxes. We’re starting to see supermarkets selling more ready-made meals and pre-packaged meals that significantly cut down on prepping and cooking time. The products are changing, and the delivery is speeding up to match, and supermarkets are embracing this. Australia has lagged behind Europe in this regard, but it’s getting there.

“The GoodnessMe Box sampling box enables customers to try before they buy. As a result, they don’t hesitate to purchase once they find a product they like – and in bulk, for that matter. More than previous generations, Millennials consider the ingredients and nutritional value of products, so the option to ‘try before you buy’ is enticing.”

But, Shulman doesn’t think this level of differentiation and service is limited to her subscription-based model. In fact, she says there are a number of strategies retailers can adopt to increase the appeal of their online product and service offerings.

She believes retailers can:

  • Increase Credibility: Stay active and engaged on social media, answer customer questions in a timely manner, and encourage customers to post authentic reviews on your website.
  • Include Product Information: Consumers are savvy about ingredients. They want to read the nutritional panel, so this should be clearly displayed.
  • Intuitive Checkout: To make the purchasing process more convenient, save previous orders and allow consumers to easily refill their baskets.
  • Think About the Mobile Experience First: Offering a seamless mobile experience is critical.
  • Offer Free Shipping: This has the power to sway an online shopping decision.

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