Siegfried Digital Retail 4.0 Concepts

1. Auflage 2024
ISBN: 978-3-7597-1635-4
Verlag: BoD - Books on Demand
Format: EPUB
Kopierschutz: 6 - ePub Watermark

E-Book, Englisch, 214 Seiten

This book deals with retail trends 4.0 with a focus on digitalization. These case studies were worked on and presented by 6th-semester bachelor students of the DHBW Mannheim retail course in a scientific research seminar.

Prof. Dr. oec. Dr. phil. Dr. habil. Patrick Siegfried is Professor of "Digitalization and Sustainability in the Food Industry" at Trier University of Applied Sciences. He has been working at DHBW Mannheim as a lecturer on the retail course since 2003.

Autoren/Hrsg.

Siegfried, Patrick

Leseproben

1. Introduction
The realm of online grocery commerce, originating in the late 1990s, embarked on a tumultuous journey of inception. Against the backdrop of the dot-com boom, numerous trailblazers ventured into this nascent domain, only to face setbacks as the speculative fervor subsided. Entities such as Migros and Tengelmann emerged as early investors in the German-speaking sphere, yet their endeavors failed to attain enduring traction (Nissen, 2023). Notably, even Amazon, a titan of online retail, encountered hurdles in replicating its prior triumphs upon debuting Amazon Fresh in the German market in 2017. (Nissen, 2023) However, the global upheaval wrought by the COVID-19 pandemic precipitated a pivotal juncture for online grocery purveyors. A surge ensued, characterized by an unprecedented proliferation and robust expansion. Suddenly, a cohort of avant-garde startups, exemplified by Flink or Gorillas (Westermeyer & Sümer, 2022), ascended, leveraging assertive marketing strategies and pioneering growth paradigms to redefine the digital shopping experience and engineer novel logistics frameworks. Concurrently, traditional brick-and-mortar grocers embarked on forays into this burgeoning domain, either through strategic investments or autonomous initiatives. (Rest, 2022) Since the onset of the COVID-19 crisis, an ecosystem characterized by dynamism and rapid evolution has emerged, wherein continual innovation serves as the hallmark. While certain enterprises have achieved commendable market penetration and recorded substantial growth trajectories (Sonntag, 2023), they now confront the imperative of attaining profitability and orchestrating sustainable expansion initiatives. Concurrently, established industry incumbents have undergone acquisitions or undertaken rationalization measures in response to exigencies of cost optimization. (Klug, 2024a) Against this background, central questions driving this paper are: How do app-based grocery shopping trends vary across different demographic groups? What are the implications of app-based grocery shopping for traditional brick-and-mortar retailers? What are the challenges and opportunities associated with app-based grocery shopping for retailers and which changes are expected to happen in this market? 2. LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT
To understand emerging app-based trends in Digital Grocery Shopping necessitates a comprehensive grasp of the factual landscape, particularly within the domains of retail and online grocery sectors. Over the period spanning from 2014 to 2022, discernible shifts have characterized the sales dynamics of Fast-Moving Consumer Goods (FMCG) products (Statista, 2024b), notably evident in the realm of online commerce. The trajectory of online sales for FMCG products has displayed a consistent upward trend during this timeframe, indicative of evolving consumer preferences and purchasing habits. (Statista, 2024a) Concurrently, the online grocery sector has experienced a notable surge in sales, mirroring the broader trend of increased digitalization within the retail industry. This period has witnessed a paradigm shift in consumer behavior, with online platforms increasingly serving as channels for procuring essential goods and groceries. The culmination of these trends underscores the transformative impact of digitalization on traditional retail paradigms. (Smiejczak & Brause, 2023) 2.1 Online Grocery Market in Germany
Recent data from Statista reveals a noteworthy trend in the revenue of online grocery retailers operating in Germany until 2022. Analysis spanning from 2014 indicates a consistent uptick in revenue when compared to the corresponding quarter of the previous year. However, it is important to note a subtle decline in revenue just prior to the commencement of the Ukraine conflict that started in February 2022. Since then, the trajectory of revenue has exhibited a fluctuating pattern, characterized by alternating periods of growth and decline (Statista, 2024b). Figure 1. Revenue from the sale of groceries online retail in Germany from 2014 to 2022 This oscillating trend in revenue suggests a dynamic and evolving market landscape, indicative of the challenges and opportunities inherent in the online grocery sector. Despite the fluctuations, the market remains promising, underlined by its substantial growth potential (Klug, 2024a). However, it is imperative to acknowledge the hurdles that online grocery retailers face, particularly in light of shifting macroeconomic conditions such as the current inflationary environment. Furthermore, examining the market share of online grocery retail within Germany from 2015 to 2022 reveals a consistent upward trajectory. This steady increase underscores the growing significance of online channels in the retail landscape, culminating in a market share of 2.9% in 2022 (Statista, 2024b). This data reflects the increasing acceptance and adoption of online grocery shopping among consumers, highlighting the pivotal role of digital platforms in shaping the future of grocery retail in Germany. 2.2 Online Grocery Retailers in Germany
In 2023, the largest player in the German online grocery market is Amazon, with a total market share of 41%, attributed to its platforms Amazon Fresh and Amazon Pantry. Following closely are Edeka with 24% market share and Rewe with 21%. HelloFresh, another significant competitor with a strong focus on its app, holds a market share of 17%. Among other app-focused companies, Flink ranks seventh with a 13% market share, while Picnic, Getir, and Gorillas each hold 7% market share, placing them at positions eleven, twelve, and thirteen, respectively. (Statista, 2024a) Although Bofrost and Eismann are not primarily app-focused, they still hold significant market shares of 16% and 13%, respectively. These data underscore the diverse landscape of online grocery retailers in Germany and highlight the importance of app-based strategies for competition in this sector (Statista, 2024a). 2.3 Demographic Differences in the Usage of App-Based Online Grocery Shopping Understanding demographic differences in the usage of app-based online grocery shopping is crucial for companies to effectively target their audience, meet customer needs, and boost sales. It is also essential to identify demographic segments with untapped potential and devise strategies to convert them into customers (Konrad & Nusser, 2022). According to this survey conducted by Statista on online buyers who purchased groceries/daily necessities for personal use via the internet in the last three months, the largest age group in Germany in 2023 was the 25-45 age bracket, accounting for 29.6% of respondents. The 1625 and 45-65 age groups were similar, comprising 20.9% and 21.1% of respondents, respectively. Older respondents aged 65-75 accounted for only 11.8%. (Statista, 2024b) Figure 2. Share of online shoppers who ordered or purchased groceries/essentials goods for private purposes on the internet in Germany in 2023, by age group The number of households in Germany purchasing groceries online or through online shops has steadily increased from 2019 to 2023, reaching 5.31 million in 2023. Notably, individuals with higher incomes tended to order groceries online more frequently. According to respondents, the most common reason for ordering groceries online was “lack of time.” (Statista, 2024b) Understanding these demographic patterns provides valuable insights for companies to tailor their marketing strategies and services to specific age groups, income levels, and consumer needs, thereby maximizing their reach and effectiveness in the online grocery market. 2.4 Implications of App-Based Grocery Shopping for Traditional Brick-and-Mortar Retailers The emergence of app-based grocery shopping has significant implications for traditional brick-and-mortar retailers, prompting them to adapt to the changing landscape of consumer preferences and shopping habits. Recognizing the market potential of online grocery retailing, established retailers like Rewe and Edeka have entered the digital arena, establishing their own online platforms to cater to the growing demand for online grocery shopping. (Klug & Nissen, 2023) However, alongside this direct involvement in online retail, there is a discernible trend among traditional retailers to invest in innovative startups with app-based delivery models. Companies like Flik and Picnic, with their agile and technology-driven approaches, have captured the attention of investors and consumers alike (Redaktion LZ, 2024). Traditional retailers, keen on staying competitive in the rapidly evolving market, have seized the opportunity to invest in these startups, recognizing their potential to disrupt the industry and drive growth. (Redaktion LZ, 2024) These investments serve a dual purpose for traditional retailers. On one hand, they enable access to innovative technologies and delivery concepts that align with changing consumer preferences (Sonntag, 2023), allowing retailers to expand their reach and offer more convenient shopping experiences. On the other hand, they represent strategic moves to diversify revenue streams and tap into new market segments. The proliferation of app-based startups in the grocery sector underscores the broader trend towards omnichannel retailing. Companies like Rewe and Edeka, through their investment in these startups, are not only expanding their digital footprint but also enhancing the integration of online and offline channels (Klug, 2024b). For...