Since the coronavirus outbreak, there’s been a profound, necessary shift in consumer behavior. Shoppers are making fewer trips to grocery stores and are instead turning to apps to replenish their food supplies and essentials. They’re also unable to go out to their favorite restaurants and are instead left to fend for themselves in the kitchen. With that extra time (and extra appetite for delicious, comforting food), more people are turning to meal delivery services. Companies like Blue Apron and HelloFresh are already seeing a surge of new customers as an indirect result of this trend. While this is excellent news for meal kit services and those who can pivot into the space, this industry has historically struggled to retain customers long-term.
Brands, now more than ever, will need to bring a customer-centric view to their product, marketing, and business model to improve this trend and maintain this growth even long after the crisis is over.
Flexibility Above All Else
Because a lot of living situations are temporary, and many people are finding themselves in uncertain territory with their finances and jobs, customers need to know that brands are willing to work with and around them. According to Guy Marion, Co-Founder, and CEO of Brightback:
One of the most attractive things meal kit services could be doing right now is offering flexibility.
“Flexibility” means expanding delivery options, free access to other offerings from the company, creating a loyalty program, or credits that a customer can use in the future. It also means giving customers the power to control their subscriptions without having to hop on the phone. There should be an easy way for people to skip deliveries or pause subscriptions without penalty.
In short, you should always do right by the customer and operate in a way that makes their lives easier.
For more on how to create a loyalty program:
Be Prepared for Supply Chain Woes
However, flexibility doesn’t mean you shouldn’t be prepared. For instance, let’s take a look at Blue Apron. While they’ve historically struggled to retain customers and stay in business, they’re now seeing a huge boom in new customers — and like many other retailers, they’re struggling to keep up with the intense demand.
In a Facebook post, Linda Findley Kozlowski, President, and CEO of Blue Apron wrote: “Within the span of 48 hours, we saw an increase in orders that surpassed the staff we had in place to fulfill this higher-than-expected demand, and this caused some challenges in our fulfillment process. Even with streamlining our operations, we had to delay a subset of orders and informed some customers that we would not be able to send them a box until the week of March 30. We had to make some changes faster than we were able to communicate them to you and understand the frustration this may have caused.”
And it’s not just Blue Apron that’s caught off guard — HelloFresh has also struggled to meet demand and deliver meal kits on time. Many customers recently received emails informing them of delays due to supply chain disruptions.
Of course, it’s impossible to completely avoid sudden changes like we’ve experienced with COVID-19, but there are a few things brands can do, and it all comes back to alignment. To avoid these hiccups, it’s essential to align your marketing initiatives with the entire supply chain. This means being mindful of your advertising efforts and what you put out there. For example, if you’re unsure of whether you can accommodate a certain amount of customers, avoid going on an ads spree to reel in more business than you can’t handle.
And if your business finds itself in an unfortunate situation? Honesty and transparency are both key in communicating disappointing news, like that the meals they selected won’t be there on time. Keep your customers in the loop — be proactive with your statements, and let your customers know what you’re going to do to make it right. Then, going forward, let your customers know exactly what they can expect and why.
For supply chain and manufacturing resources:
Maintain Engagement With Personalization
Today’s customer expects personalization whenever they interact with brands — and that means more than just addressing emails with their first name. According to Nicole Amsler, Vice President of Formation.ai, “To keep customers engaged, brands need to focus on increasing the relevance of their offers and communications. To do this, these companies need to have access to real-time customer insights and leverage technology like artificial intelligence (AI) and machine learning to speed and scale up the process of understanding what customers want and developing and fine-tuning promotions that address these motivations.”
For meal delivery brands, that might play out with customized meal recommendations, automatic reorder notifications with custom recommendations based on previous behavior, or personalized offers to encourage customers to refer or purchase additional products.
For personalization tips:
Expect to See a Continued Surge — and Rapid Churn
While experts suggest the peak of the virus has passed, there’s still an expected surge of new sign-ups for delivery and meal kit services throughout the rest of the year. However, as social distancing restrictions loosen, these companies should prepare for potential rapid customer churn. Brightback’s Marion thinks:
The winners will be those that successfully retain the new customers they’ve gained this year. There’s a lot to learn from an influx of new customers, and the companies that commit to finding these answers and making changes will survive that future transition.
Throughout this year, meal delivery brands should focus on retention and serving the customers they currently have while intentionally scaling their ability to handle more customers. Here are some examples of the processes and initiative that might include:
- More focus on personalized, agile email communications
- Better feedback loops from customers to the right teams
- More focus on gathering and using customer data
- Identifying weak points in the customer lifecycle where customers are likely to churn and finding solutions to plug the holes
- More alignment between supply chain and marketing teams
The brands that win will be those that are closest to their customers, most able to pivot intentionally, and most aligned internally.
Now that you’ve read about the rise of meal kit services, let’s explore why the online grocery industry is changing.