With the foodservice industry being forced in to a slow crawl due to the lockdown, and the grocery retail industry experiencing heightened demand, but with new rules, the wholesale market has faced some huge challenges head-on and shown some remarkable adaptability throughout the Corona Virus pandemic.
Delivered goods, click and collect service and improved online ordering capabilities have had to take high priority for many wholesalers, which is no bad thing. In both retail and foodservice, the demand for online ordering of delivered goods has increased not just since lockdown, but continuously over the last decade. With the likes of B2C offerings such as Amazon and Ocado providing sophisticated and user-friendly experiences when shopping online, retailers and foodservice operators have expectations yet to be fulfilled by some wholesaler platforms.
Jellybean recently attended an MCA webinar looking specifically at the performance of online wholesaler platforms, which highlighted a number of changes taking place and some of the key areas they are likely to be focusing on.
The wholesaler market is vast – estimated worth of £29BN a year. To put this in context, foodservice is worth £91BN, supermarkets worth £89BN and convenience stores £40.1 BN a year.
There are 800 depots across the UK including dark depots (click and collect or delivery only). Traditional wholesalers such as Bestway, Unitas and Booker make 79% of that market, whereas foodservice wholesalers such as Bidfood and Brakes make up only 19% of the market.
As mentioned, the last decade has shown a real change in the way we have ordered from wholesalers. In 2008, of those retailers that ordered delivered goods through wholesalers, 24% were ordering online – the remainder doing so over the phone. Ten years later this jumps to 98% of retailers placing orders online, a huge change for the industry.
Interestingly, in comparison, only 53% of foodservice operators are currently ordering online, with an almost equal split still choosing to order over the phone. However, there has been an increase of over 15% choosing to order online in the last two years alone – so clearly foodservice is following in retailers’ footsteps.
Wholesalers have responded by creating improved online experiences and apps for the specific purpose of online ordering, although there is still work to be done. Challenger brands are entering the market with ready to go software, tried and tested in the B2C world e.g. Amazon and Deliveroo, resulting in the need for some speedier improvements to level up the playing field.
On the foodservice side, Deliveroo announced mid 2019 their brand new service for restaurants, a food procurement app – allowing savings of up to 20% on raw ingredients. It is expecting around 5,000 of their restaurant partners will take up the service, which has the potential to impact many foodservice wholesalers.
With an eye on retailer ordering insight – there were three key take outs for me which could help to shape improvements or focus on opportunities going forward, many of which are likely to be mirrored on the foodservice side:
- The average number of sessions to build a basket this year is 6.25, in comparison to 5 sessions a year ago. This is showing a more considered approach to purchasing decisions and indicates they are more likely to be shopping across multiple sites. However, not all sessions are purchasing activity. 7 out of 10 web visits are for price checking, invoice checking, viewing account details or looking at promos or category advice. Wholesalers and suppliers need to look at more engaging ways to convert to sales while retailers are browsing.
- Search is by far the biggest function, however, 14% of searches returned no results. Misspelling and unclear tagging causes the ordering process to be more difficult for the retailer. Wholesalers and suppliers can work together and create a full list of misspellings, ensure products are tagged effectively to help improve the user experience.
- 44% of basket additions on app are using barcode scanners. A clear sign that baskets are being built on the hoof during the working day using mobiles.
The MCA team are working on a similar report which will focus on foodservice wholesalers rather than retail (which this latest report was centred around). As ever Jellybean will be sure to attend (be it in person or via webinar) when that report is complete, so that we can help our clients make the most of the online wholesaler platform opportunities – watch this space.