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The L2 report benchmarks the digital performance of 60 grocery retailers operating in the US, providing best practices and key digital strategies for brands to accelerate their entry into e-commerce and enhance fulfillment capabilities. The Digital IQ Index methodology examines a brand's strengths and weaknesses across the four digital dimensions of Site & E-commerce, Digital Marketing, Social, and Mobile. Index brands are classified as either Genius, Gifted, Average, Challenged, or Feeble.
"Digital grocery in the US has long trailed developments in Europe and Asia," explained Tom Gehani, Director for Client Strategy at L2 Inc. "However, Amazon has been quick to reset consumer expectations with a high bar for online product discoverability and fulfillment in the US, forcing Grocers to quickly advance their digital sophistication or risk defeat."
Key findings from L2's report include:
From Physical to Digital: Grocers have spent decades perfecting in-store merchandising. However, few translate these efforts to digital as only 55 percent of Index grocers offer nutrition facts on product pages, 50 percent cross-sell on product pages, and just 27 percent display sponsored products on grid pages, the digital equivalent of physical end-cap displays.
Promoting Private Label: Leading grocers often boost private label brands and bury competitors to drive gross margin. Target's private labels accounted for 11 percent of listings surfaced by 1,975 food-related queries on Target.com while Walmart's private labels accounted for 5 percent of analyzed results on Walmart.com.
Instacart Fulfillment: Grocers see Instacart as an ally against Amazon, and Instacart now works with 58 percent of Index grocers with brick-and-mortar locations. Fifty-five percent of Index grocers that partner with the delivery service host the experience under a separate, branded subdomain (e.g. delivery.albertsons.com). However, grocers should consider whether they are putting the loyalty of their customers at risk in exchange for offering e-commerce more quickly.
"As the demands and expectations of grocery consumers shift online, leading brands will be those who make basic investments like enriching product pages and encouraging customers to build larger baskets while also focusing on more nuanced strategies such as leveraging CRM and customer browsing data to personalize loyalty rewards and tracking the developments of Amazon Go and Alibaba's Hema stores," explained Bill Duffy, Associate Director for Research at L2 Inc.
The report features case studies on brands including but not limited to: Amazon, Boxed, Instacart, Kroger, ShopRite, Target, Trader Joe's, Walmart, and Whole Foods.
To access a complete media-only copy of L2's Digital IQ Index: Grocery US 2018, contact firstname.lastname@example.org
L2 benchmarks the digital performance of over 2,200 brands across 12 industries globally. Our proprietary Digital IQ Index is the global standard for measuring digital competence. We analyze 1,250 data points to provide brands with actionable, data driven insights on their digital performance.
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