COVID-19’s Lasting Effect on Ag Retail: Online Ordering

Here are four reasons why more ag input business will be done online long after we recover from COVID-19. ( LIndsey Benne )

The COVID-19 pandemic has changed the way ag retailers are doing business in 2020. But what will be the lasting effects of virtual sales, no on-farm visits and less face-to-face interaction? 

If you look to the consumer market, you may say there will be an uptick in e-commerce, as many more Americans are ordering necessities online. 

So, is ag retail different? Yes and no. 

Yes, ag retail has seen an increase in farmers buying inputs online. In 2018, Farm Journal conducted its first Crop Input Purchase Behavior Study, which found 8% of respondents currently bought some of their crop inputs online, and 13% planned on buying crop inputs online in the coming year. In mid-October 2019, the study was repeated, and results showed 11% of respondents had purchased crop inputs online, with 15% intending to do so in 2020.

There is an important distinction that needs to be made between cash and carry/transactional customers and farmer customers who are using ag retail grower portals. 

And that’s where COVID-19 will have the greatest impact---more business for ag retail will be done online. 

Here is some rationale for that: 

  1. In the past, e-commerce for ag retail has exhibited longer delivery time (when a local pick-up option was not available). And years like 2019 and 2020 have shown how paramount timing is. Farmers want and need the assurance of a person they can call to make sure ag inputs show up on time. 
     
  2. Retailers are already on the path to moving more and more interaction with customers online. In 2018, Nutrien said it intended to invest $100 million a year on development with a focus on its Integrated Digital Platform. The company says 62% of customers are active on the platform today. Chuck Magro adds most of the sales on the platform are being assisted by the Nutrien sales team, but that’s how they want customers to be introduced to the platform---with assistance and direct support.
     
  3. Retailers are demonstrating success with customer engagement. For example, after launching its new customer portal, Landus Cooperative now has 4X as many farmers signed up.
     
  4. Vendors are ready and have already reported a bump in interest from COVID-19. In the past three weeks, AgVend reports they have seen a 3X growth in their pipeline for Grower Portals. AgPro Editor Margy Eckelkamp shares more in this clip from AgriTalk: 

Here’s a quote from CommoditAg CEO John Demerly, which he said back in December 2019 during a panel discussion at the ARA Conference: “Keep in mind that technology is the enabler and not the motivator. So if the technology is the motivator, you oftentimes have a tendency to forget the customer. But if you start with the customer and understand their needs, then technology can be the enabler.”

There's a great need right now to understand customer needs and allow technology to enable more and better business. 

Customers and ag retailers are being forced to connect in new ways today. Timing and communication are imperative during this busy spring season. And the ways the industry are finding success will imprint new behaviors for the future.  

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