Grocery shoppers demand digital

Grocery shoppers have come to rely on digital channels and now expect online access in their path to purchase, a study by consumer target marketing firm SKUlocal finds.

Forty-three percent of shoppers have subscribed to receive home delivery of grocery products, and 47% have done so for beauty and personal care products, according to SKUlocal’s report “The Convenience Dynamic: How Digital Shopping Is Shifting the Grocery Ecosystem.”

“Brands and grocery retailers can no longer afford to ignore e-commerce. While some adoption rates remain low and not all categories have shifted fully online, e-commerce now represents the opportunity for significant market share which must be considered in the strategic planning process,” St. Petersburg, Fla.-based SKUlocal said in the report. “While accommodating the shift may be a challenge, it also presents a host of opportunities.”

Price plays a key role in swaying consumers to buy online rather than in-store. Of digital grocery shoppers, 52% think they find better prices online for groceries, health and beauty aids, over-the-counter health products and pet supplies, SKUlocal said. Just 28% believe they’ll get better prices by going to the store.

“It’s imperative that brands and retailers alike become very strategic on which product categories to feature and push online, and analyze which products drive more in-store sales conversions,” SKUlocal noted in the report.

For example, although Millennial shoppers are digitally native and have embraced online grocery delivery faster than other consumers, they’re also the most likely to switch channels to get what they want. SKUlocal’s research found that 56% of Millennials tend to buy natural and organic foods in-store. What’s more, only 16% have used digital channels to purchase healthier foods.

Purchases of center store and general merchandise have moved online the fastest, while HBA, OTC, and fresh and frozen foods are migrating more slowly, SKUlocal reported. Yet private label presents a sizable opportunity for brands and retailers in the digital realm. The study found that 77% of consumers have considered buying private label products online when shopping for grocery, HBA, pet care and OTC items.

“Shoppers revealed that low brand affinity is one of the main influences to consider private-label brands when shopping for high-margin grocery categories,” SKUlocal’s report said in explaining how private label is capturing strong e-commerce share.

Over the next 10 years, online grocery shopping stands to reach market saturation, accounting for over a fifth of grocery spend. That means marketers must get a better handle on where targeted shoppers are buying various product categories and why they’re using those channels, according to SKUlocal.

“Shoppers aren’t just omnichannel in terms of how they’re exposed to marketing; they’re omnishoppers that fluidly move between each channel to make the purchases that meet their needs,” the report said. “Marketers must approach them holistically if they want to capture the right touchpoints and influence them to become repeat shoppers or loyal customers.”