The grocery shopping experience continues to evolve. More than one third of U.S. grocery shoppers are now shopping online, according to Coresight Research. In their U.S. Online Grocery Survey 2019 that was recently referenced in The Supermarket News, 36.8 percent of those polled bought groceries online over the past year. This is up 23.1 percent from the previous year.
They figure that this represents about 93 million online grocery purchasers, a gain of nearly 35 million from 2018. However, their research also showed that only 39.5 percent of those surveyed plan to buy groceries online in the coming year. That’s not a significant increase, just over seven percent. Are we beginning to max out the available market for online as a part of the grocery shopping experience?
Coresight said that any growth in online grocery shopping is likely to come from the 21 percent who said they didn’t know if they would shop for groceries online in the next year. It sounds like it’s kind of like the independent voters in a presidential election!
More Online Grocery Shopping – Less Online Grocery Spending
Coresight’s survey indicated, however, that the online grocery shopping sales would grow from 2.2 percent in 2018 to 2.7 percent in 2019. While that’s a 23 percent increase, it’s not a lot of share overall.
What does this mean?
Their analysis is that there are a lot of online grocery shoppers, but they don’t buy online all that often.
They said their data indicates that 72.4 percent of those surveyed purchased “a little” and only 11.6 percent bought “a lot” of their groceries online.
Why People Like the In-store Grocery Shopping Experience
In our February 5, 2019 blog, I cited another survey by Vixxo, also published in Supermarket News, that stated that 87 percent of shoppers prefer shopping in person, with almost all Baby Boomers (96 percent) and a vast majority of Millennials (81 percent) preferring the in-store grocery shopping experience over buying online.
- 84 percent like the advantages of being able to inspect and pick out their own products
- 60 percent said they simply favor the atmosphere and experience of shopping in brick-and-mortar stores
A wise businessman I know reminded me that people value experiences. He wrote “Starbuck’s built their business not by selling a cup of coffee, but by offering an “experience.” Our monthly lunches with our neighbors are about finding new places to try out. We often return to our favorites. Sure, the food needs to be tasty, but it seems to be more about how we feel about the whole experience that brings us back.”
People like going to the grocery store because they enjoy seeing what’s on special, what’s being sampled and what looks fresh. For example, this time of year, artichokes and berries look great, are plentiful and relatively inexpensive. Yes, you could probably figure out that they’re less expensive by shopping online, but you can’t get that sensory experience or that creative idea that drives your menu planning for the week.
Why do so many people make it a point to shop at Whole Foods? It’s not because of the price. It’s because of the experience and the selection of fresh foods.
More stores are realizing that grocery shopping really needs to be about the experience. We’re seeing more food sampling stations, in-store restaurants, and ready-to-prepare meal kits salad bars, olive bars, cheese bars and even cocktail bars. (Heck, who doesn’t buy more food after a martini or two? That really changes the grocery shopping experience!) In some cases, grocery stores are becoming “a destination.”
What We Buy and Where
According to an article in The Atlantic:
Twenty-two percent of apparel sales and 30 percent of computer and electronics sales happen online today, but the same can be said for only 3 percent of grocery sales, according to a report from Deutsche Bank Securities.
In a Prevention Magazine article, of the 15 items they recommend you should always buy online, the only food item was pet food. Sorry Fido.
Buying non-shelf stable groceries online and shipping them is just plain difficult. The Atlantic article continues:
Compared to groceries, clothes and electronics and dog food are incredibly simple to deliver. A company like Amazon keeps those products stored in a warehouse, packs them in a box, and sends them on their way through the mail or through its delivery contractors.Groceries, though, can’t just be packed in a box and entrusted to mail carriers. Imagine fulfilling an order that includes Popsicles, avocados, a case of Coke, and tortilla chips. The Popsicles have to be kept cold, the avocados have to be chosen carefully, the Coke is heavy, and the tortilla chips can’t be crushed.
Grocery delivery is just plain difficult business (read the entire article in The Atlantic for details). Now, according to Nielsen, click-and-collect represents nearly half of online grocery sales, up from 18 percent in 2016. Maybe that’s better for the grocery store as they don’t have to run around, knocking on doors and dropping off groceries, but it still doesn’t solve a fundamental challenge that people like picking out their fresh foods.
It’s one thing to order online for laundry detergent or breakfast cereal but very different when it comes to fresh produce or meat. We know the fresh categories are important to consumers. According to the Food Marketing Institute, 80 percent of shoppers pick their primary grocery store because of fresh produce (the top attribute) and 77 percent for fresh meat.
I see the store employees filling shopping carts from online orders when I’m at the store. I spoke with one of them this past weekend and asked how they know what to pick out. She said that they have pictures to guide them. Even still, I think most of us prefer picking out our steaks, strawberries or other fresh items.
Grocery stores will have to continue to have to manage the different ways of grocery shopping and innovate and compete on the grocery shopping experience. And, because we choose our primary grocery store based on the quality of produce and meats, the industry needs to think about new approaches for freshness management to provide consumers with the consistent freshness and quality.
Maybe we’re close to maxing out on people who want to buy their groceries online because most of us still value the grocery shopping experience. We’ll have to wait and see but it’s certainly an exciting time to be in the retail grocery industry!