Study: Majority of grocery sales are digitally driven
Digital's influence on grocery overall has nearly doubled year over year, and is now impacting the in-store experience.
More than half (51%) of grocery sales are digitally influenced, according to a new report from Deloitte, entitled “The Grocery Digital Divide: How Consumer Products Companies Can Deliver on the New Digital Imperative." This momentum has pushed the grocery sector closer to other categories such as health (51%), apparel (56%), home (58%) and auto (59%) in terms of digital influence. However, grocery still lags leaders such as electronics (69%) more distantly.
Since 2013, digital's influence in-store across all retail sectors has grown a dramatic 300% — from 14% of all transactions to 56% in 2016. Alongside overall digital influence growth, mobile's in-store influence has also expanded from 5% in 2013, to more than one-third (37%) in 2016.
"People are making decisions about what goes in the grocery cart long before they get to the shelf or even the store," said Barb Renner, vice chairman, Deloitte LLP and U.S. consumer products leader. "The majority of food and beverage purchases still happen in the store, but consumers' online or mobile experiences impact those purchases much earlier in the shopping journey.”
Despite digital’s influence, there is still a divide between what consumers desire and what the current grocery shopping experience offers. Despite digital's expanding impact, the survey noted only 31% of grocery shoppers indicate that digital makes grocery shopping easier (versus 42% across other retail categories), offering a strong opportunity for those companies who can improve the experience.
Digital now permeates the grocery path to purchase by influencing shoppers' awareness, selection, purchase and loyalty, and in turn is driving new and evolving consumer habits. For example:
• More than three-quarters (77%) of consumers surveyed use digital touchpoints, such as recipe websites and blogs, to drive awareness and find inspiration.
• Eighty percent of respondents have used a digital device to browse or research grocery products, tapping sources like manufacturer and grocery retailer websites.
• Nearly three in 10 (29%) of respondents try products based on online recommendations and reviews, and seek answers from blogs and social media posts alongside online product reviews and loyalty apps.
• Consumers who embrace digital options — such as on-demand local delivery, in-store coupons and instant rebates or mobile checkout — before or during a shopping experience end up converting 9% more often than those who shy away from digital leading up to their purchase decision.
Additionally, grocery retailers' mobile apps lead over consumer products' brand apps. In fact, 41% of respondents turn to grocery retailers' apps compared to roughly one-quarter (27%) who use a consumer product company's app. This leaves ample opportunity for brands to innovate through digital technologies and deliver compelling grocery experiences. Mobile, for example, is driving the convergence of consumer and shopper behavior and expectations, with roughly one-third (34%) of respondents saying they use a smartphone to help choose a brand during a shopping trip.
"Digital is expected to play an even bigger role in delivering the experiences shoppers' desire," said Rich Nanda, principal, Deloitte Consulting LLP and U.S. consumer products corporate strategy and growth leader. "However, many consumer products companies and their retail partners have yet to take full advantage of the opportunity, potentially leaving money on the table.”
To deliver on the new digital imperative and drive brand engagement in today's digital, omnichannel marketplace, consumer products companies should consider transforming how they operate day-to-day to become faster, more granular and more connected within a digital-first world. Companies who are slower to react to this changing landscape may go home hungry, according to the study.
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Report: Mobile e-commerce sales to hit $250 billion by 2020
Mobile e-commerce sales will account for nearly half of all online commerce in just a couple of years.
This was according to “A Mobile Mindset,” the second volume in the five-part series, “The 2017 UPS Pulse of the Online Shopper.” The report, from UPS, is based on input of over 5,189 comScore panelists who made at least two online purchases in a typical three-month period.
According to the study, mobile e-commerce sales are projected to grow to $250 billion by 2020. Meanwhile, mobile retail sales in the United States are expected to be 48.5% of retail e-commerce sales.
The report reinforces that customers are getting increasingly acclimated to using their smartphones as a shopping tool. In fact, 48% of smartphone users have already made a purchase on their personal device. While these transactions extend across customer segments, 66% of these purchases were conducted by Millennials.
Specifically, 17% of online transactions are already occurring on a smartphone, and 29% of millennials are making these purchases. When given the choice to use apps or mobile web, four in five smartphone users chose to shop using retail apps — a practice that is preferred by 92% of millennials, the study revealed.
“In terms of discretionary spending, mobile commerce (m-commerce) growth is far outpacing e-commerce and brick-and-mortar,” the study said.
“Over the past five years, shoppers have simply become more comfortable using their mobile devices to research and buy online, resulting in more time and money channeled via m-commerce,” the study continued. “The projections for continued growth in m-commerce make it essential that retailers of all sizes be properly positioned to provide an optimal experience via mobile devices.”
There is a huge trend of mobile commerce and the business is going to be bigger and bigger in upcoming years.