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Omnichannel shoppers pay off for grocery chains

Symphony RetailAI identifies ‘Amazon effect’ sales opportunity for low-penetration, in-store categories

Russell Redman

June 23, 2021

3 Min Read
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Omnichannel grocery shoppers shop more frequently and spend as much as 20% more compared with in-store-only shoppers, Symphony RetailAI research found.Kroger

Omnichannel grocery shoppers shop more often and spend up to 20% more versus in-store-only shoppers, new research from Symphony RetailAI shows.

What’s more, supermarket chains highlighting nonfood product categories online could create an “Amazon effect” and snare incremental sales with a one-stop shopping experience, Dallas-based Symphony RetailAI said Wednesday.

The findings come from shopper data collected across Symphony RetailAI’s customer base of leading grocery retailers during first-quarter 2021, encompassing 421 million baskets in the United States and Europe. The company specializes in artificial intelligence-based marketing, merchandising and supply chain solutions for grocery retailers and CPG manufacturers.

Symphony RetailAI said that although its research indicated that half of shoppers abandoned the e-commerce channel after one online purchase, those who stayed engaged became more loyal. In turn, retailers able to retain online and omnichannel shoppers — and nudging in-store shoppers to make online purchases — will gain long-term loyalty.

Customers already are making more repeat purchases. Of shoppers making an online purchase in Q1 2021, seven out of 10 returned and bought again within the same quarter, up from five out of 10 in Q1 2020, Symphony RetailAI said. Its data also showed that if online customers return to the channel seven times in the first three months, they are three times more likely to become a long-term engaged customer.

Related:Grocery plays its part in Amazon Prime Day

One-third of customers are deemed as long-term engaged; however, they represent more than half of all online sales, making them four times more valuable, Symphony RetailAI noted.

“Because most grocery retailers operate with narrow margins, it’s important for them to find ways to gain more share of wallet while building customer loyalty,” Chris Koziol, CEO of Symphony RetailAI, said in a statement.

“Providing customers with an online channel to shop how and when they want is a key differentiator, as we see with the increasing loyalty of omnichannel shoppers observed in our data,” he explained. “Therefore, the online grocery trend should be seen as a win-win omnichannel scenario, not a matter of ‘bricks versus clicks.’ Our recommendation to retailers based on these insights is to focus on the complete customer lifecycle and buying journey with an emphasis on driving repeat purchases to build long-term engagement.”

Year over year, online grocery sales doubled in Q1 2021, accounting for 8% of total grocery sales, Symphony RetailAI reported. Perhaps more important, online sales contributed 50% of total revenue growth in the sector during Q1 2021, up 20% from before the pandemic.

Related:Online grocery shopping grows amid ‘pandemic-induced channel stickiness’

Within that growth, there’s also the potential for grocery retailers to create an “Amazon effect” by spotlighting untapped product categories, notably in nonfoods, Symphony RetailAI said. The research revealed that only 15% of retailers’ in-store nonfood inventory was also purchased online. 

As more consumers seek convenience in a post-pandemic retail environment, grocers can broaden their online offerings in nonfoods and promote a one-stop shopping experience, realizing up to 1.8% sales growth from low-penetration, in-store categories, according to Symphony RetailAI’s research.

“A retailer with an omnichannel strategy puts the customer — not corporate processes — at the center of its strategy,” Koziol noted. “To make omnichannel profitable, grocers need to understand their customers, provide them with the goods and services they want through any retail channel they desire, fulfill their purchases quickly and efficiently, and offer outstanding customer service. Now more than ever, it’s crucial for retailers to leverage AI and machine learning to quickly identify and execute customer-centric opportunities, with agility and precision that engage and encourage loyalty.”

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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