For shoppers, the digital shelf is now directly in their pockets—and that applies to the U.S. retail and fast-moving consumer goods (FMCG) landscape. E-commerce has driven the lion’s share of growth in the last year. However, while it’s important to note the differences between online and offline metrics, it’s even more imperative to remember that the key to growth is not comparing bricks versus clicks or pitting one retail channel against another. Instead, success in the future will depend on the seamless integration of retail infrastructure with the technologies in consumer hands to enable shopping and pre-shopping research across both worlds.
In order to understand the role that digital plays in shopping habits, retailers and manufacturers first need to uncover which categories consumers are purchasing online the most frequently. Health care, personal care and household products are the top three non-food contenders, but shoppers aren’t leaving edibles out of their online baskets: snacks, packaged grocery and beverages lead among food departments.
While many departments, like health and personal care, have quite the presence online, many food-related areas of the store have yet to make their mark in the online world. In fact, online channels still lack the breadth of assortment in an average purchase, compared to a basket variety bought in physical stores. The average number of departments purchased per shopper inside a store is still nearly double that of the departments purchased online.
For digital retailers, home delivery is not the only option, though it’s by far the most popular of options: 87% of orders are completed via home delivery. On the other end of the spectrum, 8% are fulfilled via in-store pick up, and 4% by curbside pick-up. While non-food categories are among the top purchased online, there is a huge growth opportunity with food, particularly with fresh and perishable items, within curbside pick-up. Surprisingly, fresh categories have the highest consideration of curbside pick-up fulfillment (50% would consider it, and 34% even prefer this type of fulfillment for fresh).
Though there is promise across both food and nonfood domains with regard to online shopping, the need for seamless integration with retailers is further underlined. Over one-third of retailers (36%) do not provide online purchasing, and 33% are not equipped to support online purchases (via click and collect, store delivery or home delivery). This leaves much possibility. It also highlights how much progress still lies ahead in the evolution to a true omni-channel grocery environment.
Subscription services are garnering much attention, especially as consumers become inundated with data, information and marketing messages. Given the hundreds of decisions we’re forced to make every day as a result of this data overload, many consumers are using subscriptions as a means to automate and streamline their lives. These services provide the convenience of regular product stock-ups, with the time savings of routinizing purchase decisions among trusted products.
Today, 20% of online orders are part of a subscription service. While many of the most popular subscription-ordered categories are non-food related, meal kits and chips are two food categories that have begun to penetrate the online subscription space.
In today’s fragmented environment, the brick-and-mortar experience is a blend of physical items, tangible attributes and decisions that are influenced, learned and brought to life through digital technologies. Consumers desire and demand local, personal, convenience and ease in their shopping … so retailers should consider remodeling their store formats—both online and offline—to meet those needs. Being mindful to who is entering your stores, and converting opportunities is an arduous task, made easier through analyzing Shopper Essentials about your unique consumers’ path to purchase.
For more information about the evolution of today’s digital retail landscape, download the Total Consumer Report, Volume 3.