Untapped potential: Why older shoppers are an online grocery growth opportunity for supermarkets

Recognized as one of the retail food industry’s preeminent advisors, Supermarket News contributor Bill Bishop has been involved in research and consulting for several decades with a concentration on the new issues, competitors and developments impacting this business.

In 2011, Bill co-founded and became the Chief Architect at Brick Meets Click, an analytics and strategic insight firm that leverages its industry expertise, clear thinking and practical solutions to help clients solve the challenge of finding new routes to success in the changing U.S. grocery market.

It’s easy for grocery retailers to get caught up in the newest tech and miss the obvious opportunities to connect existing services with customer, just in new ways. Based on our ongoing research, there is clearly an opportunity to sell more groceries online to older customers.  

Here’s how this growth opportunity plays out, and a few ideas for how to position the benefits of delivery and/or pickup for certain situations.

A growing base of customers with money to spend

Households over age 60 are the fastest-growing age group in the United States. Today, this group includes 45 million households, and it’s growing at a rate of 3% each year, compared to 0.7% for the total U.S. population (for a 9-year CAGR ending 2019). Older households also hold substantial amounts of household wealth, so they have money to spend on what they need and want, and they frequently need help with some of the heavier aspects of grocery shopping.

Related:Retail expert Bill Bishop on what to expect next from Walmart

Many older households already buy groceries online

Older consumers may not be digital natives, but 75% of households over age 65 do use the internet, according to Pew research — and more than 12 million of those households bought some groceries online in the last month. That’s about one-fifth of all U.S. households that regularly shop online for groceries.

Older households are beginning to use more delivery and pickup services

Older online grocery shoppers have historically had a strong preference for receiving orders via “ship to home.” One reason is that older shoppers tend to buy more specialized food and personal-care products with features and benefits that are often not available in their local supermarkets.

Recent Brick Meets Click research shows that older shoppers are beginning to use more delivery and pickup services. The penetration levels for each method in households over age 60 have shifted from August 2020 versus October 2021:

• Ship-to-home has dropped from 68% to 57%.

• Delivery has increased from 30% to 36%.

Related:U.S. online grocery sales level off in October

• Pickup has risen from 29% to 32%.

All of these changes work to the advantage of the supermarket.

Tap the potential: Getting more older households to use online grocery

Here are five situations where older consumers may want to avoid going into the supermarket to shop, along with a way to get them to shop online instead.

Better safe than sorry: While in-store grocery shopping can be a social experience, some people view it as a task that they don’t enjoy, and/or they are still nervous about catching COVID, so the risk outweighs the benefits. This gives the grocer an opportunity to promote the safety and security of contactless order and pickup, while also making the point that it can save time so they can focus on whatever else makes them happy.

Let us do the work of shopping: Some older shoppers don’t have as much energy or strength as they used to, which can make it difficult to execute all the tasks involved with shopping, so this is an opportunity to promote pickup — no need to walk the aisles, unload groceries onto the belt, and then load them into the car. Other shoppers have limited mobility and must use the parking spots reserved for disabled shoppers. This makes these spots an attractive location to promote both pickup and/or delivery services. 

No car/no problem: When an older shopper stops driving, they still have the ability to order online and have the order delivered — or have a friend/family member pick up the groceries for them. Online grocery makes this transition easier by offering the right option for the situation — delivery when needed, or pickup by a designated person.  

Get the products you need more easily: Certain products across the store are more likely to be bought by older shoppers. This gives retailers the opportunity to promote bundles of products that can simplify the ordering process by offering one or more preset shopping lists that can be adjusted with just a couple of clicks.

Offer a delivery experience that exceeds expectations: Some retailers are seeing that when they increase the quality of the delivery experience, they can attract and retain more older shoppers. Retailers can work with delivery services that specialize in high-quality service that has the ability to build a strong working relationship with customers and put in motion a virtuous cycle.

Delivery and pickup are where much of the online grocery growth is happening in today’s market, and older shoppers represent a valuable opportunity to grocers if they are willing to court them.

It is worth digging deeper to see if you’re getting your fair share of this spending. Please feel free to reach out to the team at Brick Meets Click to talk more about what you can do for you organization.