Photo: RetailWire; Source: Instacart
Is e-grocery less convenient than shopping in stores?
A Bain & Co. study concludes the reason online penetration remains so low in the grocery category versus others is because in-store shopping is still far more convenient.
The findings based on a Google and Bain survey of more than 8,000 U.S. shoppers include:
- Planning: While e-commerce sites should make researching, list building and list sharing easier online, consumers remain “highly-dependent” on analog tools such as combing circulars and writing lists on paper.
- Browsing: In store, shoppers have been taught to quickly find the products they desire, discover and evaluate new ones, and make price trade-offs. Websites lack visual clues for browsing. Online browsing also still tends to produce irrelevant search results, unhelpful product recommendations and limited filtering options.
- Price comparisons: With visible discount tags, less expensive private label offerings right next to name brands, and shoppers’ understanding that lower-priced options typically sit near the bottom of shelves, comparing prices is easier at the shelf. Further, many consumers don’t trust prices online, either because they believe prices are inflated or because of challenges making price trade-offs in the moment.
To some degree, online shoppers are more satisfied once they get accustomed to digital tools. Some 63 percent of those who shopped for groceries online three times report that it saved them time — a jump of 21 percentage points from first-time online shoppers.
Yet grocery shoppers who have not shopped online in the past 12 months say that building a shopping list and having ways to compare prices are the two features they would value most from an online grocery retailer. That contrasts with more advanced features such as personalized recommendations and substitution algorithms that some e-grocers are touting.
Innovative approaches to bring in-store grocery habits to digital include Tesco giving its online shoppers the ability to see how long their produce is likely to remain fresh and to buy individual bananas by count vs. by weight.
With text messages being used by many consumers, a “more comprehensive, simple solution” should support list sharing, say the study authors. Voice assistants offer the potential to simplify lists and virtual reality holds out promise to help online consumers “feel” products.
Discussion Questions
DISCUSSION QUESTIONS: What parts of the in-store grocery experience will be easy and which will be hard to bring online? Are grocers over-emphasizing the benefits of personalization over other features that should be advanced online?
Poll
BrainTrust
Nikki Baird
VP of Strategy, Aptos
Dr. Stephen Needel
Managing Partner, Advanced Simulations
Grocery shopping for pure commodity products might work online. Online shopping for fresh products will not really work, not even in the long run. People want to enjoy and experience this part of the shopping. Proactive retailers have developed and implemented compelling grocery store formats with incredible merchandising especially in the fresh food area.
I think it’s instructive to distinguish between convenience and habit. Getting over the hurdle of placing a first order is key; learning to browse and search an online grocer’s selection takes a little getting used to.
Once these and a few other speed bumps have been overcome and a shopper is habituated to a new behavior pattern, it is tough to beat the convenience of re-ordering a household’s most commonly purchased items and having them delivered to the doorstep within a few hours.
The easiest part of grocery shopping to bring online is shopping for staples. Many staple items have a predictable replenishment time frame and online shopping tools can automatically populate the shopping list and even create the order on a weekly basis.
The tough part is the items that consumers prefer to choose themselves, like meats and produce. Another aspect that is hard to duplicate online is exploring new items or shopping for an item that is not a typical purchase but for a special meal. In the olden days, I used to like trying samples to find new products, but very few grocers do this today.
Shopping habits are slow to change, and grocers need to focus on convenience and make the online ordering process as easy as possible.
I am eternally fascinated by this question and have used my own household many times as guinea pigs. My husband does our weekly grocery shopping, but I’m the one that does the meal planning. Plus we have three other people in our household who have strong opinions about what they want from the store. Finding a list app that works for all of us has been nearly impossible. My husband – by all rights a tech-boy – refuses to shop online for groceries for reasons that I don’t understand beyond “it’s way easier to just go to the store.” And definitely the amount of work that would be required to maintain an inventory of my pantry makes using recipes as a starting point for a shopping list also impossible.
I feel like this is an area that is ripe (haha) for new approaches. Many grocery e-commerce sites are still very low on product content, which inhibits the ability to use facets to get to what you want, and many facets don’t take advantage of the decades of behavioral science that has gone into shelf approach (what’s the most important facet for coffee? It’s if it’s whole bean or not, not actually whether it’s caffeinated). Different sizes in packaging are easy to convey physically, difficult to convey online – resulting in a lot of price confusion. Retailers with club cards have decades of data they could use to personalize and help give consumers a leg up in building a shopping list, but few of those initiatives have stuck – as if retailers are afraid of revealing what kinds of insights they could potentially get from customer shopping data (assuming they ever invested enough in it to get insights out).
So… that leaves a lot of room to make online grocery shopping better. But there’s a lot of legwork needed to get there.
I’m not sure it is an issue of “convenience” as much as it is the subtleties of each of the models. Physical retail is being disparaged because of the focus on convenience, but the experience is better (if we’re honest). Some parts of physical retail will probably never be moved totally online, and if they are it will be “less than” a positive experience. Online IS more convenient but not for everything.
The lack of penetration can be ascribed to a few factors:
First, online grocery still has some operational challenges to gain more adoption with pickup logistics at a physical store (still the most pervasive model until delivery grows) and product substitution that still limits a great customer experience. Second, online purchasing makes sense especially for replenishment items, but the risk of returns, poor product choices and the emotional connection we have to products will continue to be a struggle for this model. Third, digital models need to become more seamless and transparent for them to continue to grow in adoption. There are still too many touchpoints and too much friction for such a complex model as retailing, especially in segments like grocery.
If we remove some of these fundamental barriers to growth then online will continue to grow in adoption.
There is usually an implicit assumption that people want to shop for groceries online and that this is inevitable – I don’t think that’s necessarily true. There are so many aspects of shopping for food that cannot be easily replicated online – freshness, comparison shopping, and exploring are just some. Perhaps before grocers worry about what features are needed, they should figure out if their clientele actually cares.
I view grocery shopping as two distinctly different experiences. One is almost by rote and easily transferred to online. And one is close inspection, item by item. The rote process involves center-aisle packaged goods. Replenishment of known product. Not a lot of thinking or decision making. The close inspection process is for fresh, perishable product. Fruit, vegetables, freshly baked bread. Unknowns. Item by item choices. I personally won’t be moving this portion of shopping online any time soon. But I can see where the time-starved consumer might welcome this option. But even then, after viewing the best possible website configuration, the quality of the execution depends on the human being picking and packing the order.
Hands down, the inspection process for produce and fresh ingredients is an obstacle that needs to be a priority.
Perishables, specialty items, and even some wine offerings will always do well in supermarkets who cater to their customers, with gourmet delis, choice or prime meats from a real live butcher, specialty foods, and someone who knows how to pick a great bottle of wine for that special dinner. Add in some great baked goods and you have a sustainable business model, especially in areas that are dying for these types of stores. That is the reason I’m still here, as grocery staples you can find everywhere or get delivered to your homes.
Online grocery shopping for me is a “I have absolutely no time” convenience that always leaves me wondering if I got the best products available.
Stocking up on staples and canned goods isn’t something I do much anymore, but when I do I am careful about which items I put in my cart. I am also one of those people who likes to choose their own produce and meats. And I can do it quickly because I have been trained to grocery shop since birth.
The only hassle is bringing the bags into my house. If grocers could figure out a fast “I Shop/They Deliver” service I’d be all over that.
Convenience can be defined by the equation (time spent * physical effort expended * ability to have it when you need it). Online grocery shopping today takes significantly less time and effort than a trip to the grocery store, even for a first timer. And grocers are getting better at getting my order to me when I need it. Habits take time to change, but trust the math in the long run.
Grocery leaders are recognizing that the “big bet” in their digital transformation is circling back to brick-and-mortar. Now they are able to leverage new technologies to drive operational improvements and customer experience (e.g. real-time sensors to ensure freshness and reduce wastage, friction-less checkout, towers, lockers and curb-side pick-up to improve convenience, digital signage to enable story telling, instant promotions, reducing prices dynamically, and so on).
Beyond these experience efficiency improvements, grocers are also stepping up their game leveraging deep customer insights (which most retailers envy) to tailor assortments, develop distinct private label products, and enhance overall quality and variety in prepared, and grab and go foods – focusing on what was described a decade ago as the broader “share of stomach” market (including convenience, QSRs, etc.) by leveraging local, fresh, healthy, artisanal products and ingredients that today’s consumers are looking for.
Grocers are uniquely positioned to own the authority/credibility here, having served many local neighborhoods in some cases for over a century.
This household is not a shelf filler. We are mostly on-demand item acquisition or replenishment. As such, we have found it much easier walking and picking. In one swoop, it is all done. And besides, I think we stop more often and shop, along with purchasing prepared meals for both of us. We enjoy what the grocers want: always finding those items we want, not need. And I think that is a huge value to in-store grocery shopping.
This study validates our own research into online grocery shopping. Unless people are buying regularly purchased items, many struggle with aspects of the shopping experience including brand selection, understanding the size of items, assessing freshness, and getting ideas about what to buy for certain meals. For a lot of people, it is easier to simply walk the aisles and select what they want.
As a consumer, one of the most frustrating things about online grocery ordering (our family has been doing groceries online every week for over eight years) is finding product. Entering a search term can of bring up some bizarre options. This only adds to the length of time it takes. Improving this has to be one of the first steps, but what surprises me is that despite advances in search technology and AI the improvements have been slow in coming.
Recent research tells us that the typical consumer visits four to five stores per week for various FMCG (fast moving consumer goods) purchases. Taking that habit online quadruples the challenges of creating a list, searching for deals, and then picking up or getting delivery. Couple that with the overarching desire to pick out our own meat and produce, and it’s clear why food shopping hasn’t fully made the leap online, and possibly never will.
Grocery shopping is the last major category to really take hold online. Online grocery shopping has been in place since somewhere around 1989 with Peapod. We are a stubborn animal and old habits are hard to break. Although redemption has been historically low, can you believe how many of us still clip paper coupons? This will simply take more time. Overcoming some of the obstacles mentioned in the study will help, however I believe this is more of a behavioral challenge than a retailer service delivery challenge.
The role of the retailer is to make it easier for consumers to purchase online, tools like Tesco’s will only aid in increasing online penetration.
Well known packaged goods are easy to bring online, consumers trust them. Commodities are price driven and online sales will not change purchase motivators. The challenge is for fighter brands, new products, and innovation (including sub-brands). But it’s not the role of the grocer to encourage product comparison or recommend trial. Ultimately, suppliers have to provide the incentive to online consumers if they want to compete in the online space with exclusive online incentives to encourage comparison and trial or proprietary online presence that lead consumers to the grocer’s online site.
Shopping for products that are a regular, staple part of your weekly shopping trip will become easier to be sure. List building and personalization technology will make to traditional “stock up” shopping trip easier, particularly for time-starved families. However, gaining the impulse or unexpected add-on purchase will become more difficult unless personalization technology makes quality recommendations during the online shopping experience or through digital marketing tactics such as email or during search activities.
The significant missed opportunity for most grocers is the meal planning and meal solution use case, where an online shopper seeks to research or gain recommendations on purchases as a solution to a specific shopping objective, such as an event (birthday party, entertaining, tailgating, etc.), or to solve a specific need state (Keto diet, low carb, organic ingredients, etc.).
This is actually all quite backwards. Rather, it is bricks that has to learn to be more efficient, approaching clicks, on the VAST majority of their 40,000 items in their stores. Sure, bricks handles “small-selections, large displays, fresh” better than for the vast array of Consumer Packaged Goods (CPG,) where bricks retailers derive the largest share of profits — from their brand suppliers!
Obviously, fresh and immediacy are major advantages for bricks retailers, but both can be countered by speed from the online, clicks side. Can bricks retailers afford to “screw” their major source of profits, brand suppliers, by flooding their CPG/FMCG stores with the retailers’ “own” label products?
Having said all this, bricks will always have unassailable advantages of immediacy (speed) and the 360 experience. However, they are pathetically disadvantaged in the long tail of the “Everything Store.” That is everything, except fresh (or immediately prepared) plus the entire social/360 environment.
It’s no wonder that single item purchases are the most common number of items purchased in supermarkets. Two being second, etc. As “neighborhood pantries,” supermarkets will be driven into the convenience store corner, if they don’t advance their efficiency more widely over the whole store! (Selectively!)
Any discussion about convenience must address which “convenience” is paramount for a given purchase interaction? These may be time-saving, effort saving, or both: Delivered in one day is convenient. Available for immediate pickup at midnight is also convenient. Auto-replenish my stored shopping list is convenient. Load my order into my vehicle a minute after I arrive is convenient. Send me a curated set of suggested items and deals is also convenient. Just-walk-out with my order is convenient. Bring it to my home fridge is convenient.
So for me, the digital-versus-in-store dichotomy is somewhat forced. Modern grocers must prepare to offer convenience in all its forms to all shoppers in every encounter.
Or they may strategically decide to offer certain conveniences and eschew others that bring a poor return. Customer response will be the deciding metric.
Online grocery shopping is likely seeing regional adoptions by specific consumer cohorts. Acquisition strategies will have to account for localized consumer “purpose,” the why. My groceries are delivered at 6 am once a week in Brooklyn via Fresh Direct. I love it, but I haven’t any other choice unless I want to carry shopping bags on 3 trains/subways. Not happening unless it was at the farmers market on Saturday morning in Union Square. However, I am an original West Coaster and been out here for the last 2 months and until now, not once thought about ordering groceries online.
The online experience is about convenience. It takes time to know what you want to buy and how to go about buying it. The online shopper is not going to browse the site like an in-store shopper browses the aisles. Personalization will come from AI that recognizes the customers shopping/buying patterns. For now, the true online grocery experience is in its infancy. Retailers will have to get more people online and using the system at a higher level for it to become mainstream. Customers have to be trained to break a habit, in-store shopping, that they have been doing most of their lives.
Consumers today have an expectation of personalization which is evident by the DTC companies that have won over customers from legacy brands. Grocers want to get in on the action. Where I think they fall short is execution.
When Amazon Prime Now came on scene I was eager to try it especially due to the store selection — big fan of Sprouts and Bristol Farms. I was unfortunately disappointed to find that my produce was not carefully selected — lettuce was wilted, tomatoes on the bottom of the package were rotten. They were quick to refund and apologize, but even on the next order I was equally disappointed. Instacart was similarly if not more disappointing. I once got a whole ham instead of the requested sliced ham from the deli and something is always out of stock, yet when I go to the store and check, it’s there. I am an avid cook and am very selective about my ingredients which I’m sure is not the majority, but sloppy execution can undermine great potential.
In the end, grocers can create an incredible shopping experience that exceeds expectations, but if they can’t execute the order, it doesn’t matter.
Produce is one of the most difficult aspects of placing an online order because there is no selection process. Grocers should be more focused on customer experience and visual presentation before they begin heavy investments in personalization. If we can’t get the experience and order processed successfully, there is no reason to personalize anything.
Easy to bring online:
Hard to bring online:
Like others have mentioned above, staples will be the easiest to move online but fresh products are another story. Few people trust someone else choosing fruits, vegetables, meats and fish so that remains a challenge. Focusing on the customer journey vs. personalization features like deals makes more sense. We need to make features like price comparison, product information and list sharing easy and intuitive to win the purses and wallets before we add the bells and whistles.
This one fascinates me and was actually part of a RetailWire Live discussion between myself and Dave Weinand. Yes, it’s about convenience. As the person in my household who does most of the grocery shopping, I find the in-store experience at most of the grocers near me to be uninspiring and too time-consuming. I’m in a fairly dense suburban area and while we have many grocery store options, most people choose to shop at the same time of day on the weekends and that makes for a very long, slow in-store journey that the stores are just not set up to support well. So any online option should be amazing for, right? Well, not exactly….
My online options are limited to Instacart through Wegmans. And while I do save time overall it’s not an ideal experience either because product selection, list building, and discovery still leave a lot to be desired. Sure, it may be easier to find new products by looking at a shelf than choosing from a product search online, but does it have to be? I’d argue the current set of online grocery options have focused too much on the checkout and delivery aspect rather than the product selection aspect of the overall experience.
For example, if I use the Wegmans app to build my shopping list for in-store visits (which I do) why can’t I click one button and transfer that list to Instacart to build my basket? That would offer true convenience considering most of the items I am buying I buy almost every week.
Then, what if I want something new? Looking at rows of same size images of products on the screen is not the same experience as a careful merchandized shelf display. So why don’t grocers design webpages to show new products in the same manner? Instead, they give us more of the same infinite scrolling list of similar products with thumbnail images.
Until those types of user experience elements are improved, online grocery will continue to have slow adoption and slow growth.
I still can’t imagine how grabbing a plump bag of chips while walking through a grocery aisle can give me anything close to an online experience of seeing a picture of the bag online and clicking a button- no matter how tastefully done. So the question really is not whether we’re bringing customer store experiences online, but whether we’re changing customer experiences to select or prefer the online experience over the brick and mortar one.
There will be some customers who will be more adoptive of making their 100 item online list and sticking to it, but even grocery shopping comes with a huge amount of impulse buying. Walking through the store and seeing the juicy tomatoes or a beautiful cake on the countertop drives a different experience than any recommendation engine.
The biggest misconception around shopping is the expectation that humans are rational and all they care about is the purchase and end state, not the journey. This is a societal behavior change and the online experience provides only selective conveniences at specific times. I believe the end result will be like many items in the world — coexistence.
Online shopping for groceries feels most valuable if you know what you want to buy. If you always buy the same things then it’s very quick and convenient to create a shopping list and rebuy it week-on-week (or at whatever frequency you like). Most of us though have some deviation in our shopping habits — we might be buying a week’s worth of products, or a monthly cupboard top-up, or a quick visit to get dinner for that day. The variety of wants and needs means that going into the store usually wins out for convenience and speed.
As the report notes, we’re used to shopping in the store. We often tend to visit the same supermarket (or handful of spaces) so we know exactly how to navigate them and where their usual products are. They also can be exposed to new products and offers. This becomes more difficult online where you may be searching in a different way. Rather than browsing shelves, you can bypass entire product categories if you just use the search function.
There’s also a question of whether you’re actually seeing everything in the category you want. I think until the online grocery experience becomes more in tune with the way we shop in-store, it’s likely the store will be more convenient for a lot of customers.
Imagine the very different experiences of strolling through a farmers market or specialty store choosing ingredients versus hurriedly shopping for such items as paper towels, pet food or laundry detergent. The first experience is sensual, visually interesting with wonderful aromas while the second experience is visually unappealing and devoid of any pleasure. Therefore it’s more likely that people will prefer the in-store experience for perishables and the online experience for non-perishable items.
I am not sure that at the end of the day, shopping online for grocery brings time saving. The problem is that as many experts mentioned it may work well for long-shelf, regular and semi-automatic purchases, but it’s almost impossible to replicate for fresh food products, where most customers prefer close inspection of what they buying. You need to actually touch fruits and vegetables, and have a very close look the meat and fish you are buying.
So we have:
If you shop in brick and mortar you may combine 1 and 2, hence saving time, so it is more convenient for consumers.
There are a few product categories that customers feel compelled to touch, compare and shop. Grocery is one of them. The main reason is rate of new product introduction in the shelves that piques the interest, discount tags that are visible, and overall visceral experience that it gives. This is hard to replicate online.
The “showrooming” effect of electronics isn’t there for grocery, unless it is a packaged commodity product with long shelf life. Even at Costco, where arguably 90% of the store could be ordered online, you have customers flocking to the store because of the overall in-store experience.
The big challenge for digital is creating the sense of excitement and that tactile, even olfactory, element of the physical store. Shoppers can’t smell the baked goods online, nor can they feel a ripe avocado. Equally important to many is the human interaction that is limited online. What physical stores selling online do have as an advantage is a base of these elements to work from. Transferring the experience from brick-and-mortar to digital isn’t easy, but when it works it can keep sales at that retailer and even grow them.