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Pros and Cons of E-commerce Selling Fresh Foods

Challenges in Cold Chain Digital Transformation August 8, 2022

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Food and Beverage Food Supply Chain

Fresh foods are a daily necessity for customers and the industry due to their inelastic demand and short shelf lives. It means high frequency, low price per transaction, and a low gross margin model.

In the last two years, the world has lived through different waves of COVID-19 and its lockdowns. However, e-commerce also grew at an all-time high in 2020, allowing businesses to operate online and consumers to access fresh foods from the convenience of their own homes.

It resulted in the unprecedented global growth of 54% in 2020, proving that online channels are a critical strategy for increasing market share for the F&B industry.

Let’s take a look at the pros and cons of e-commerce selling fresh foods.

For businesses

Pros

  • Companies can leverage and analyse a massive amount of consumer data collected when they make online purchases, allowing them to understand better their customers' purchasing habits.

  • Dairy, produce, fresh meat, and frozen food, which traditionally has a lower online representation, have also seen a significant increase in consumer willingness to buy online.

  • Businesses that can build loyalty, personalise offers, and create incentives for customers while increasing their frequency and basket size of online purchases can develop a solid omnichannel value.

Cons

  • Although most people are leaning towards e-commerce, some people may still prefer to purchase food in person to touch, smell, and see it to judge its quality. 

  • It is difficult to build a trusted brand name, especially without a physical location with a track record and face-to-face interaction between customers and sales staff.

  • It requires technical knowledge and patience to run a business online. You may need time to study and apply or hire someone to manage it, incurring extra costs. Technical problems are common in online businesses. If mishandled, it risks losing customers.

For consumers

Pros

  • Customers can choose any fresh foods they want from any supplier, anywhere in the world, thanks to e-commerce. There is more selection than you would find in a physical store, and the freedom to browse without feeling rushed is priceless.

  • Customers can enjoy shopping from the comforts of their homes without worrying about leaving their homes. Fresh foods are available with just a few clicks, and you never have to worry about carrying enough cash.

  • Purchasing fresh foods online saves time and sometimes even money due to limited offers and bundle discounts. You can buy something the night before, and you will receive it the following morning.

Cons

  • Customers frequently have to pay more for expedited shipping or wait several days for the product to arrive. Customers may be turned off by the wait. When a customer requests a refund, shipping becomes even more complicated for businesses. For example, if fresh foods face a delay, the quality would be affected causing dissatisfaction.

  • Customers are not able to physically see or touch their fresh foods, which they would be able to in a brick-and-mortar store. They would quickly lose interest due to them not knowing the quality and freshness.

  • Every time a consumer enters their information into a website, they run the risk of identity fraud and other risks. If your website does not persuade visitors that the checkout process is safe, they may be put off from purchasing.

In summary

E-commerce has brought in a big pool of customers in a short period for the fresh food businesses. Though there are several disadvantages for businesses and consumers, the benefits outweight most of it, and it is the way of life moving forward. There will be an increasing demand in e-commerce in the near future, and all industries should invest in it.





 


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