How e-grocery tech can empower underrepresented businesses and communities
In 2021, food insecurity in the U.S. rose 45%, with 19.5 million households struggling to feed their families. Federal support like Supplemental Nutrition Assistance Program (SNAP) exists that provides up to $150 per household through Electronic Benefits Transfer (EBT) cards to increase access to healthy groceries. Yet more than 20 million of the lowest-income households have received minimal benefits.
Some 68% of the cause of food insecurity was due to supermarket access. Food deserts are where the poverty rate of an area is 20% or more, or the nearest stores are over a mile away from at least a third of residents. Customers without cars cannot get their food – and stores without customers close down. But what if the local stores had demand visibility?
Ninety-five percent of executives believe geospatial data through online sales is essential to achieve financial and customer experience goals. Point of interest (POI) data across near and distant areas can improve store inventory listings, support market reach, and personalize customer offerings by providing insights into demand by region. Tiny, faraway businesses can put their town and products on the map with online grocery platforms and reach a wider audience.
Yet, the issue isn’t just physical access for rural (food desert) residents. When the nation’s most important anti-hunger program is limited to in-store purchases, what happens when the consumers don’t have physical access to a store, transport is limited (and costly), and their payment cards don’t work online? How can digital retailers help them?
The future of grocery stores in rural deserts is more than being online. It’s about providing access economically, physically, and digitally.
Supporting economic access with EBT
Today, over 38 million people in the U.S. use economic support to make purchases. The challenge for stores is that only specific items are available to buy with EBT card credit – for example, restrictions apply to alcohol, tobacco, and pet food, making order division and purchasing complicated.
There are two things retailers need to do to make EBT function online:
1. Categorize their items into eligible and non-eligible products.
2. Update their transactional system to accept two digital payment methods (i.e., a debit card and their EBT card) for one purchase – ensuring the eligibility list is applied to the EBT method.
Platforms supported by EBT will automatically split each bill, charging all eligible food items such as vegetables, grains, and meat products to the benefits card and any non-permitted items to their alternative card. E-grocery technology that makes dual-payment processing part of grocery stores’ online shopping platform will help retailers increase economic access to their rural EBT customers and minimize suffering in their community.
Underrepresented businesses in rural areas can benefit by increasing the number of citizens able to shop in their stores. In addition, the new EBT functionality creates awareness among local shoppers in need who had not heard of the program. When stores use their geospatial data to see patterns of member growth, purchase increases, and EBT card users, they can support the national movement in identifying areas and the extent of the need to allocate food relief better.
Still, customers may gain the ability to purchase online. But how can small retailers in underprivileged areas get orders to the customers’ homes without breaking the bank themselves?
Driving convenience with omnichannel delivery management
It’s no rocket science that each delivery van containing five extra customer orders means five more people to absorb the delivery fees. And when every vehicle is wholly loaded, retailers also reduce fuel consumption, costs, and carbon emissions. Nevertheless, the challenge for rural communities with a smaller customer base is ensuring every drive is optimized.
There are several ways local retailers can use e-grocery tech to improve delivery efficiency in their area:
1. Collaborative delivery network platform: independent stores in the area join forces to share journeys (and transport costs), from manufacturers to warehouses and the customers’ doorstops.
2. Expand regional digital customer: opening their online stores to outer regions – providing a more extensive customer base, and increasing the ability to deliver at maximum capacity.
3. Scheduled drop automation: stores in smaller areas can choose to only deliver on a particular day(s) so all their customers preplan their orders and make purchases for the weekly drops.
The roles of manufacturers, warehouses, and physical stores are overlapping. Retailers must manage the inventory of each, along with their on and offline sales, to ensure all orders are met and delivered from the most convenient location.
Omnichannel distribution is the management of deliveries from multiple collection and drop-off points. When smaller retailers unite, they can share distribution centers based on their geospatial customer data to improve resource allocation, minimize journey lengths, and ensure product availability. Platforms that integrate demand, drivers, assets, and inventory data in real-time will support independent stores with efficient and collaborative decision-making so that stores can share drivers with several stops en route.
Delivery systems benefit senior citizens as well – my dad’s in his 90s, and I often purchase and deliver his groceries. Although I can continue ordering for him, today’s user-friendly dashboards also simplify processes for tech novices to comprehend. According to NPD Group, the baby boomer demographic spent 49% more money online in 2020 than the prior year, primarily due to improved user experience.
But, what features are attracting the broader market?
Mobile platforms for the customer and the retailer
Online shopping is less about replacing people going into stores than making local retailers accessible to a larger market. By 2025, expected mobile commerce (m-commerce) sales will double to reach $728.28 billion and account for 44.2% of retail ecommerce sales in the US.
With four-fifths of rural Americans having a smartphone, versus 72% with laptops and broadband, mobile shopping increases access more than any other device. However, many retailers are still getting it wrong.
Mobile sites make for 97% of all check-out abandonment, compared with only 20% abandonment on mobile apps (and 68% abandonment on desktop sites). With customers storing card details in mobile wallets, those in the mobile commerce space have firsthand access to improving the end-user experience. The power of apps and their ability to keep customer information securely facilitates repeated orders without entering payment credentials each time, encouraging higher cart completion.
In addition, apps with personal logins and purchase history make it easier for retailers to get to know their customer’s individual preferences and suggest healthy additions to complement their shopping lists. For example, data patterns tell retailers that 78% of customers buy large quantities of pasta. They notify their customer’s app: Hey, we noticed you like pasta. Did you know zucchini provides vitamins C and K? Would you be interested in this zucchini pasta recipe?
By providing personalized tips and simple response questions for their consumers, stores encourage application use and can gather data to improve their inventories and enhance their customer proposition further.
The move to online shopping and mobile applications opens access to new markets – so even the rural deserts can share and appreciate their local goods – while returning location data to the stores for enhancing product allocation.
When independent retailers, delivery drivers, and communities collaborate, they can share resources and data to optimize inventory lists, storage, and distribution to meet customer demands efficiently and cost-effectively. Allowing customers to save their payment details securely, access personalized tips and rewards, and even use their EBT cards means the whole community can feel supported.
Bagrat Safaryan is cofounder and CEO of Local Express.
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