The Adoption of Digital Marketing in Sri Lankan Supermarkets

Digital marketing is the practice of using digital distribution channels to promote products and services to reach consumers in a relevant, significant, personal, and profitable manner. With consumers' increased use of digital media, more businesses are turning to digital marketing to reach their target customers. Digital marketing is quickly becoming more popular for product sourcing, allowing businesses to engage with customers and gain a competitive edge.Specifically, the retail industry is required to adopt and implement digital marketing to sustain their businesses (Jayamali et al., 2023). As the retail environment is highly competitive and dynamic, adoption of digital marketing has become an indispensable requirement for many retail businesses.

The retail industry in Sri Lanka

The retail industry is required to adopt and implement digital marketing to sustain their businesses. Retail businesses use digital marketing to expand into new geographic areas, increase cost-effectiveness within the supply chain, and improve a firm's visibility. As the retail business is highly competitive and dynamic, the adoption of digital marketing has become an indispensable requirement for many retail businesses.

In Sri Lanka, the retail industry has expanded quickly over the last ten years and is a substantial contributor to the country's GDP. According to Euromonitor International (2022), Sri Lanka's retail sector accounts for one-third of the country's GDP and with nearly 14% of the population engaged in retail by 2021, the sector also plays an important role in the country's employment. The retailing sector includes the supermarket industry. For selling food and groceries, several sizable supermarket chains have emerged. As convenience is a major benefit of Sri Lankans' Western lifestyle, which drives the supermarket sector, supermarkets have been actively seeking acceptable solutions and techniques for adopting and integrating digital marketing into their business processes. 

The supermarket sector in Sri Lanka

During Sri Lanka's colonial era, the Cargills and Millers department stores introduced the supermarket industry to the country. The supermarket sector in Sri Lanka is dominated by large grocery chains like Cargill's Food City (Cargill 2023) and Keells Supermarket (Keells 2023). Keels Supermarket is one of Sri Lanka's largest supermarket chains with 116 stores located across the island and remains the most valuable supermarket brand which expanded its operations immensely (Brandirectory 2021). In addition to these, there are smaller grocery chains that can be found: Arpico, Satoshi, Spar, Centra, King's Super, Laughs Supermarket, Orbico, Crystal, and Prince Super. Along with big grocery chains, there are a lot of single-owner, self-service, and retail businesses operating throughout the nation.

When analyzing the customers of retail businesses in Sri Lanka, most of the customers are very knowledgeable with new trends. Because, during the COVID-19 pandemic situation, most of the supermarkets have moved from offline selling to the online selling process to satisfy their customers’ needs. Then most people have started to purchase their goods through supermarket’s digital marketing platforms. This helped the supermarkets to remain in the retail industry. Supermarkets now expands their digital marketing activities to adopt new innovations to satisfy their customers’ expectations in a delighted manner. 

Digital marketing adoption in Sri Lanka

In an ever-changing business environment, supermarkets need to create a competitive advantage by making effective use of digital marketing. Many supermarkets in Sri Lanka have used technology to some extent. Although every supermarket has a unique strategy for connecting with customers, not all of them utilize technology to the same degree. However, each of them appears to have a firm grip on the customer base in their ways. For example, Cargills Supermarket has optimized its value generation through backward integration, visiting farmers to acquire fresh products and having a reliable delivery network to reach customers (Cargills Ceylon, 2020). Despite offering online purchasing to its customers, Cargills Supermarket makes no mention of using sophisticated business analytics in their public annual report disclosures. 

On the other hand, when shoppers started shopping using online shopping, Keells Supermarket could not meet the sudden demand on their online site. To get around it, they have increased their multichannel marketing efforts while concentrating more on digital platforms including websites, social media, affiliate marketing, emails, and search engine optimisation (Liyanage et al. 2021). The bottom line for Keells Supermarket is that when they were prepared to reevaluate their business strategy, they discovered an issue with not paying enough attention to alternate purchasing channels. Therefore, Keells Supermarket has gone on to plan a better future in digital media. Keells Supermarket designed business intelligence analytics using a loyalty customer database of over 1.3 million consumers and shopper information (Lionage et al. 2021). They stand at different levels when it comes to using digital media to communicate with their consumers. Keells Supermarket is the fast-growing retail supermarket segment, the newly rebranded Keells overtook long-time leader Cargill's Food City brand in 2019 (Brandirectory, 2019). Also, Keells Supermarket gives technology-driven shopping a strategic priority and integrates digital marketing into their business processes (John Keells Holdings PLC, 2023). These progress creates a wealthy compertition for adoption of Digital marketing by supermarkets in Sri Lanka.  

The adoption of digital marketing in the context of digital transformation

Sri Lanka experiences the worst economic crisis in decades (The World Bank, 2022). The government of Sri Lanka has demonstrated its commitment to accelerate digital transformation as a holistic strategy to cover all segments to overcome the economic crisis. Digital marketing is essential to the global economy in light of digital transformation and that it has a significant impact on company success through digitalized technology and entrepreneurial mindset. As a result, more research are required to study the progree of the adoption of the digital marketing. It is also important to identify key drivers to boost digital marketing adoption for company success in the new context of digital transformation in developing countries like Sri Lanka.

References

Brandirectory (2021), URL: Sri Lanka 100 2021 | The Annual Brand Value Ranking | Brandirectory

Cargill (2023). Cargills Online - Sri Lanka's Freshest Online Grocery Store. Available at https://cargillsonline.com/. Accessed on 25 July 2023.

Cargills Ceylon, A. R. (2020). Cargills (Ceylon) PLC Annual Report 2019 - 2020.

Euromonitor International. (2022). Retailing in Sri Lanka. https://www.euromonitor.com/retailing-in-sri-lanka/report#

Jayamali. M. D. R., Alexander, R., Venujan, K., and Thompson, N., (2023). Factors Influencing Adoption of Digital Marketing by the Supermarkets in Sri Lanka. 34th Australasian Conference on Information Systems (ACIS 2023), 62, Wellington, New Zealand. Accessible at: https://aisel.aisnet.org/acis2023/62 

John Keells Holdings PLC, (2023). Re-rating. Available at: https://www.keells.com/resource/John_Keells_Holdings_PLC_AR_2022_23_CSE.pdf. Accessed on 29 July 2023.

The World Bank. 2022. The World Bank in Sri Lanka. Available at https://www.worldbank.org/en/country/srilanka/overview. Accessed on 22 October 2023.

Liyanage, O. N., Bandara, W. W., & Wickramasinghe, C. N. (2021). Technology Orientation and its impact on Consumer Repurchasing Intention: With evidence from Modern Trade Industry in Colombo, Sri Lanka. GSJ, 9(3).