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Online grocery shopping is pretty much all about convenience
Online grocery shopping emerged as a way for customers to get what they needed while limiting potential exposure to the virus at the beginning of the pandemic. A new survey shows, however, that convenience and not safety is now the main reason that consumers are buying groceries online.
Seventy-six percent said they shop for groceries online for the sake of convenience and ease while only 56 percent said they do so to avoid potential COVID-19 infection, according to an ACI Worldwide and PYMNTS survey of more than 2,300 consumers. In-store shopping, however, remains far and above the favored way of getting groceries with 81.8 percent preferring to shop and pay in-store. Only 18.1 percent said they prefer buying online. Twenty-one percent said that they shop less in-store now than they did before the pandemic. Fifteen percent have increased shopping for groceries in-store since the pandemic.
Early in the pandemic, online grocery delivery and adjacent services like curbside pickup experienced an unprecedented increase in adoption due to concerns over the potential in-store spread of COVID-19.
Though fear of contracting COVID-19 in a grocery store was still high in February of this year, anxieties have settled significantly, according to FMI’s “U. S. Grocery Shopper Trends COVID-19 Tracker: Back to School/Back to Office” research, Supermarket News reports. Sixty percent now see shopping in-store as an acceptable risk, and those who are most concerned about COVID-19 infection and the Delta strain are comfortable with mask requirements as a preventative measure.
While it might seem odd that consumers would grocery shop in-store more since the beginning of the pandemic than before it, such a behavioral shift could be the result of more perceived safety compared to eating in restaurants or growing more accustomed to in-store shopping during the first wave of restaurant shutdowns starting in early 2020.
The importance of convenience doesn’t mean that concerns around safety no longer exist, particularly as COVID-19 cases have been overwhelming medical facilities in some states around the U.S. Studies conducted last year showed in-store safety was among the most important factors for shoppers when deciding to shop in-person vs. from their phones or laptops.
In apparel, chains including Nordstrom even began using online influencers in campaigns on social sites like Instagram to assure customers that it was safe to return to stores.
- Convenience, More Than COVID Safety, Spurs Continued Digital Grocery Shopping Practices, According to New ACI Worldwide and PYMNTS Study – ACI Worldwide
- Survey: Convenience drives online grocery shopping more than COVID – Supermarket News
- For many shoppers, a return to normal has been put on hold – Supermarket News
- Retailers focus on making safe spaces for customers and associates – RetailWire
- Can influencers make stores feel safer? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: What does the consumer desire for convenience mean for grocers looking to compete for online shoppers against rivals who also offer delivery and curbside pickup? Can you point to grocers that currently excel in digital grocery operations and what do you see as the next generation of improvements coming down the line?
Poll
Loading …BrainTrust
Early in the pandemic the number of people shopping online for groceries rocketed, as did the percentage of their food spend made online. Over time, those numbers have moderated and there has, in some consumer segments, been a shift back to stores. Overall, the pandemic accelerated online grocery and it will remain elevated above pre-pandemic levels. However some of the wild forecasts about the trajectory of online grocery are now being revealed as highly exaggerated.
We have done a lot of deep work into understanding the preferences of grocery shoppers across all channels. It shows that online is very convenient for some. But it is not clear cut. Some consumers hate organizing online delivery. Many find navigating websites annoying. Others feel they get more inspiration from stores. And quite a few actually like visiting supermarkets for social and other reasons.
This is where the “online is the be-all end-all” narrative falls down. Online is a channel that has a major role to play. So do stores. Using them together to deliver on the needs and preferences of all shoppers is what counts.
Convenience is that thin, invisible layer right above safety on Maslow’s pyramid of needs. Given the choice, shoppers will choose convenience every time. (Did Archie Bunker ever go to the kitchen and get his own beer?) What retailers will need to figure out is this: How do we get customers to do more of both (online and in-store)? Otherwise the reduction in store visits (especially for chains that don’t get the safety measures and messaging right) will probably cut into impulse buying at a fairly high level. Retailers haven’t spent millions and millions of dollars figuring out how to lay out their stores and tweak merchandising for nothing.
MFCs, MFCs, MFCs — that is the future of online grocery shopping. The manual Instacart model is broken, which they even admit with their move to Fabric robotic picking. Who can put up with Instacart clogging their aisles and owning the customer? MFCs are priced to sell and retailers are poised to buy.
Once again, convenience comes in as a hot topic. Prior to the pandemic, convenience was a differentiator. Today, it is an expectation. While grocery delivery has been around for decades, Amazon/Whole Foods became the “poster-child” of grocery delivery during the pandemic. Just yesterday we had a feature article in our discussions about Kroger and Instacart. The pandemic accelerated the consumer’s desire for convenience, beyond the reasons of health and safety.
Interesting that price is not mentioned here – Amazon is so successful because they can deliver a lot of products quickly and at a lower price than in-store. When only 8 percent say online and home delivery are their preferred method, I wouldn’t be worrying about this much. Instead, worry about making it easy for those who want to see inventory and/or shop online to do so. Then worry more about keeping your stores clean and stocked.
It is a tough balancing act for grocery retailers. Online operations take significant investments with long payback periods. If they do not invest, they will be left behind. Partnering with Instacart and others will get them online, but with a steep price to pay, strategically.
Business leaders need to make critical decisions without all the facts – which categories to sell exclusively in-store, which online? Should there be a price difference between online and in-store? Should the same promotion be run in-store and online? Should they encourage customers to shop online? Should they partner with Instacart? If so, should it be restricted to some categories?
There are no easy, cookie-cutter answers. Each grocery retailer needs to analyze their situation and make these choices.
Convenience doesn’t have to mean delivery. And it doesn’t always mean fast. Often it’s more convenient to go into a store to select and purchase items rather than use energy to wonder if an online product will meet expectations. But many retailers have taken the simplicity out of the in-store experience by forcing people online for ill timed pieces of the customer journey. Yes customers have become used to shopping online, and are comfortable navigating multiple channels to get the products they want. But convenience means a better balance between online and in-store to make the journey more comfortable and emotionally satisfying. That’s convenience today.
Multi-channel is all about customers, not channels. Customers will define their preferred shopping options. The ability to shop for groceries online changed the projected growth curve for online food shopping. Recent research data highlights that the growing concerns about Delta and Mu may result in a pull back from in-store grocery shopping. Going forward the opportunity that I still feel has been underdeveloped is BOPIS. If retailers can execute this option and bring customers into the store, even for only a short period of time, the opportunity to purchase high margin items (flowers, bakery, cheeses, etc.) would have a significant impact on the retailer’s bottom line.
Who is doing it well? Whole Foods, Walmart, Kroger and Shoprite.
Customers don’t see channels – they see brands, therefore creating a harmonized experience and eliminating friction is critical. Convenience can be considered another term for friction-free and taking away pain or time consumed as part of the shopping process is time consumers can use for more enjoyable activities. Delivery and pick-up are table stakes for grocers now. The next stage could well be focused on offering easy change between the two fulfillment approaches but also reducing the friction, and time spent actually compiling an order. In-kitchen barcode scanners could help to put items that are close to empty on the order but also innovations such as scanning a recipe from a book and adding ingredients to the order could well be appreciated by consumers.
Convenience always wins – even over price. Retailers now should focus on making the in-store experience more convenient. For the record, self-checkout is not convenient.
Competition over convenience had forced grocers to re-engineer their online processes for efficiency and ease, which boost loyalty.
H-E-B and Publix stand out for their solid digital grocery operations.
Exciting next-generation improvements include instant delivery. On-demand grocery is heating up with Kroger and Instacart, Gorillas, Gopuff and Dija delivering groceries in as little as 10 to 30 minutes.
Amazon drive-thru grocery service and Walmart’s ghost kitchens save consumers time. Efficient voice tech will also grow, especially for reordering standard, center store products. Expect far more automation in fulfillment centers, including robots, to speed up order processing.
The customer is looking for reliability and quality in addition to convenience. The key parts of convenience that many retailers still struggle with are having the products/brands that the consumer desire in stock, having a consistent delivery that matches the customers schedule, and having strong interactive communication about the order status. Until these foundational elements are mastered the rest will keep many customers away as pandemic conditions subside.
Grocers have been surprisingly open to tech adoption with an emphasis on delivery with boxless, reduced times, or porch-placed coolers.
People go to grocery stores because search and discovery for food is unpleasant. Obviously standing weekly orders address the issue but people still like to touch the produce and ship for add-in items. AI is a solution we here used for e-commerce a lot but not that much for grocery. this crossover would be beneficial.
I think consumer desire for convenience translates to a better omnichannel experience rather than just online. I think Walmart is doing a good job of thinking omnichannel – creating a unified experience across app and store navigation, Walmart+ service, and frictionless checkout with mobile scan-and-go.
Convenience is important to grocers but not at the expense of profitability. Sometimes retailers forget that convenience is really about making it easy to do business with you – from shopping for weekly groceries to having the right products in your pantry. The end goal is still converting that convenience into revenue.
The tech and engagements from Albertsons and Kroger to Walmart and Target have mostly been behind the scenes in the back office or at the DCs. The best conveniences are invisible. Yet they have most impact to the customer and retailer.
Online grocery has dropped 30 percent since March 2021 (both delivery and BOPIS). The additional costs and management of online shopping vs. the convenience isn’t adding up to most shoppers.
Consumers want grocers to provide meal solutions and replenish other essentials. Online ordering, inventory visibility, relevant recommendations, secure checkout and a variety of delivery options are all important.
It appears convenience will continue to be the primary reason online grocery works, with the main drawbacks being the ability to select one’s own produce or losing the enjoyment of going to the store.
Now, with hybrid models in both work and school and families juggling schedules all from the home, lower priority mundane tasks are being outsourced, and necessity kicks in. Grocers can key into these new and growing felt needs with a needs-based segmentation that better serves target audiences, defines a long-term growth plan, and tangibly informs business moves.
Winning strategies will differentiate their value proposition and messaging, acquisition strategies, promotions, offerings, and marketing investments around these consumer segments. By putting the shopper at the center of the business, a good segmentation can also be leveraged to form membership strategies around meeting the individual segment needs, build loyalty programs, and design incremental tiers of service offerings (like priority delivery or elevated shopper interaction capabilities).
This capability to understand consumer needs is infinitely closer in reach to the grocery industry through ecommerce, thanks to increased data and machine learning.
As we establish our “new normal” post-pandemic, needs and benefits change. Shoppers who were forced online for safety had their eyes opened to a new experience, so it’s not surprising that convenience, not safety, is the long-term outcome of value that has resulted from the pandemic. For a grocer to excel moving forward, it’s important to take advantage of omni-channel possibilities — offering secure e-commerce experiences from home page to checkout and extending that to curbside pickup and BOPIS (buy online pickup in store) for grocery shopping. And I use the word “secure” very specifically. Consumers must know that their personal information is handled securely by the grocer, and that the potential for fraud is minimized throughout their transaction.
Convenience is everything, especially in the pandemic-like economic climate we are living through. Consumers who have moved to the online grocery shopping experience will most likely stay there, vs. other consumer groups that take advantage of either in-store or delivery journeys. Those customers who are comfortable with grocery home delivery most likely will not return to the stores.
The key competitive differentiator in competing with the Instacart model is the strategies to mitigate the last mile of fulfillment. Successful and scalable online grocery is critically dependent on the dark store and micro fulfillment operating models. In addition, the incorporation of robotics, automation, AI, and other emerging technologies will drive the industry forward.