The accelerated, COVID-fueled adoption of online grocery has been a game changer, and likely a permanent one. But while overall adoption of online has grown by close to 200%, the number of shoppers buying groceries online from their preferred brick-and-mortar retailer has not grown, finds a new survey from Mercatus Technologies, with research and insights from Incisiv.
The survey, eGrocery’s New Reality: The Pandemic’s Lasting Impact on U.S. Grocery Shopping Behavior, surveyed nearly 60,000 American shoppers across every region in the country. It found that among the total of 43% respondents who had shopped online in the past six months, just 26% shopped online at their preferred brick-and-mortar grocer.
“With close to 60,000 respondents across the U.S., we analyzed more than 48 million data points and found that shoppers are highly satisfied and loyal to their preferred grocery store, but this loyalty does not extend to the online channel,” said Amar Mokha, chief opearting officer and benchmarking lead for Incisiv, in a statement. “While the adoption rate of online grocery has increased significantly, grocers need to improve pickup and delivery slot availability, promotion and coupon availability, and product substitutions to improve customer loyalty online.”
“This is indicative of a highly competitive marketplace and experimentation by customers,” affirmed Mercatus, driven by attractive discounts and promotions; stock availability; availability of fulfillment options (curbside, free home delivery by brand or partner); and other online order incentives.
The stakes are high. Online grocery is expected to account for 21.5% of total grocery sales by 2025—an estimated $250 billion, which is more than a 60% increase over pre-pandemic estimates, finds the survey, which also found that 90% of customers are expected to continue shopping online post-pandemic. Competition in this channel will continue to intensify, as retailers continue to invest in their digital channels and make the online shopping journey smoother and more convenient.
While there’s little loyalty among online shoppers, customers reportedly have a high degree of satisfaction in the online buying journey, finds the Mercatus/Incisiv survey. “However, expectations for a seamless online shopping experience will continue to rise, and retailers must address them to ensure future growth and online shopper retention,” Mercatus says.
The survey found that 72% of respondents were satisfied with online product assortment, and 71% were satisfied with both search and discovery, as well as pricing. When it comes to online purchases, the survey further found that shoppers had a relatively high level of satisfaction with the quality of produce and meat, availability of product information, and consistent in-store and online pricing/service and delivery fees.
Online grocery shoppers were less satisfied with availability and selection of products (weight, size, etc.); advanced search and filter options (e.g. search/filter products with dietary restrictions such as gluten-free); and promotions and online coupons.
During the pandemic, categories such as canned and frozen food, as well as household care products saw the highest online adoption, according to the survey. However, post-pandemic, these categories are expected to see the highest relative decline of about 6%, as customers intend to return to purchasing products from these categories in-store.
Which grocers are the ones to watch? The Mercatus/Incisiv survey gave shoutouts to The Kroger Co. and Lowes Foods for Best in Class Fulfillment; Brookshire’s Food and Pharmacy and Target for Best in Class Operations; and Weis and Giant for Best in Class Personalization.
“Shoppers have clearly expressed their needs: better inventory visibility, more convenient fulfillment options, more intelligent search options, along with safety and security,” says Mercatus. “Retailers who invest in these vital features and services for their shoppers today, will be rewarded with increased e-commerce adoption and online shopper loyalty tomorrow.”
“The growth of online grocery in 2020 and its predicted long-term impact, coupled with customers’ continued loyalty to brick-and-mortar, makes it clear that these avenues must complement each other in creating a great customer experience across a grocer’s entire brand,” said Sylvain Perrier, president and CEO of Mercatus, in a statement. “In order to round out the loyalty to online channels, this data makes it clear that brands should make investments in digital functionality, especially regarding product search, discovery and product information.”