Grocery e-commerce is still a small, but growing, part of the overall shopper basket. Those who embrace it like the ability to track their purchases and review their history. Here, retail and e-commerce analysts weigh in and offer four tips to maximize those functions.
While the option to purchase groceries online isn’t clearing shoppers out of grocers’ aisles anytime soon, it increasingly must be on their menus to satisfy shoppers and compete in an Amazon-driven retail era, where consumers can have almost anything delivered day or night, without ever having to leave home.
Industry estimates put brick-and-mortar sales at 90% of U.S. consumer spend, but the 10% that’s e-commerce is growing at a faster pace. With the overall grocery market at $675 billion in the U.S. alone, according to Morgan Stanley, that’s a lot of baskets. Many grocers offer at least some e-commerce – whether BOPIS (buy online, pick up in store), direct home delivery or partnerships with a service such as Instacart to handle delivery. According to LoyaltyOne’s “Online Grocery Research U.S. and Canada” in 2016, North American consumers are relatively open to shopping for groceries online at least some of the time, while maintaining a hearty appetite for in-store shopping. Half of those who say they sometimes buy groceries online still spend 60% of their shopping time in stores.
LoyaltyOne surveyed 2,500 U.S. and Canadian consumers about their grocery shopping habits and found that product quality, variety and relevance are overwhelmingly the top reasons for choosing a primary store (cited as important by 96%, 95% and 94% of respondents, respectively). Convenience, too, is key, and 59% would switch to an online retailer for added convenience. Respondents’ grocery shopping involved online purchases 50% of the time over the past year – 8% of the time using BOPIS and 42% purchasing both online and in store. Meanwhile, 21% said they’ve never considered ordering groceries online, and 25% have never done so. Those who do aren’t going anywhere: 49% say they’ll shop online the same amount over the next year and 46% will do it more frequently.
Interestingly, among those who shop online for at least some of their grocery needs, most identified the ability to track their spending and shopping history as a big draw, while many also cited the convenience of reordering as a perk. A whopping 92% agreed with the statement, “It is easy to keep track of my order and spending with an online order history.” And 83% agreed with the statement, “It is convenient to build my online cart by adding recently ordered items on ‘insta-cart’ feature.” Both of those results were consistent across all demographics.
Making better use of these tracking and reordering features, it seems, can create a better experience and potentially encourage more consumers to give it a try. That being said, there’s room for grocers to do a better job of tying loyalty programs to e-commerce. It is even more evident in the finding as 59% of online shoppers report that their online grocery websites do not offer loyalty programs.
Grocery e-commerce isn’t going away: Morgan Stanley analysts predicted online grocery will grow not just in North America but in other markets, particularly in Germany, as well as the U.K. and France, where the practice is relatively mainstream. Making the right investments into an e-commerce strategy is invaluable to the bottom line.
As shoppers turn more attention to online, relevance will be the big opportunity for retailers, said Brian Kilcourse, Managing Partner at RSR Research LLC, a retail technology research firm.
“Relevance is much more important for consumers than price, especially for grocery, where there’s rough equivalency in price and assortment,” Kilcourse said. “Consumers are talking a lot to us about what they need. If you stop talking about products and start talking about consumers, it changes the nature of things.”
A key benefit of e-commerce tracking features, from a consumer point of view, is the ability to manage costs. But very few retailers get excited when they hear that shoppers kept to their budgets, said Keith Anderson, Senior Vice President of Strategy and Insight at Profitero, an e-commerce analytics firm.
“But there are opportunities to thoughtfully surface products that weren’t planned – high-affinity products that go well with the planned purchases,” Anderson said. “Virtual bundling is an immense opportunity that is tough to even fathom in a brick-and-mortar world with fixed linear space and the logistics cost of putting forth every permutation of item A and item B.”
Here are four added tips for maximizing the benefits – to consumer and retailer – of the tracking and purchase history functions.
- Make the first time as easy as possible. Many people won’t try online shopping because they think the first time will be a hassle. For example, the average Amazon order has one or two items; the average grocery order has 20 or even as many as 40 items, said Anderson. Anything the retailer can do to automate the first order and fill in the shopper’s list is a huge help. This is a great place to tie in data from the loyalty program to jump-start the process.
- Look at data differently. Shoppers leave lots of digital bread crumbs that show us who they are and what they want, said Kilcourse. These can be used to improve the tracking and history functions. Does the consumer open an offer online? Take a redirect? What is their loyalty data telling you? Look at email opens, redirects, purchase history, peer-to-peer information from the digital space, external data from their marketplace and their demographics and psychographics. This isn’t the same as scoring people. The new predictive analytics is about finding the most probable outcomes and solutions to a need. It gets away from just pushing product through a channel and more to a solution orientation.
- Involve brand partners. This can benefit shopper, retailer and brands, said Mark Heckman, Principal of Mark Heckman Consulting and a longtime supermarket marketing and advertising executive. “And it can start to mitigate the fact that you’re really not making money on any one trip (with e-commerce). Part of this is predicated on critical mass,” he said. “Take that data to your brand partners and say, ‘I’ve got 10,000 people here who buy your item on a regular basis, and I can reach them via app or website.’ ”
- Give relevant content. E-commerce channels provide the perfect opportunity to share content about product nutrition, allergens, health benefits, suggested food pairings, recipes and more. If you can help people solve the “What’s for dinner?” question, all the better, especially if a single click adds all ingredients to the cart. Providing attractive photos and enticing descriptions of items adds the “sizzle.”
As grocery e-commerce continues to inch forward, the data that comes from e-commerce tracking and history features will allow retailers and shoppers alike to make smart decisions.
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