The Future of Online Grocery Shopping in the United ... - Kantar Retail

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Digging a bit deeper, the differences between casual and dedicated online grocery shoppers reveals some key differences in motivations for purchasing groceries online (Figure 12). The biggest difference between these two groups is along the “save time vs. save money” dimension: casual online grocery shoppers are significantly more likely to cite saving money as a reason for buying groceries online (54% vs. 40%), while the dedicated shoppers are significantly more likely to cite the time-saving advantages of buying groceries online (54% vs. 31%). This important difference suggests that the dedicated grocery shoppers who shop the traditional online supermarket-type retailers are more likely to have integrated online grocery shopping into their overall grocery shopping routine, are moving shopping trips and baskets away from the store to online, and may be willing to pay a small premium for the convenience that online grocery shopping offers. These shoppers are much more likely to cite that it takes longer than expected to shop in stores, reinforcing the willingness to trade a convenience fee for their time. © 2012 Kantar Retail Figure 12: Why Shoppers Purchase Groceries Online Saves money Convenient to have groceries delivered to my front door Wider variety of grocery products available online Special promotional deal Easier to find what I need Saves time Don’t have to carry heavy items home Helps me stick to a budget Easier to browse deals and coupons Quality of produce and fresh items is better than in stores Easier to purchase online when I’m already researching online It takes me longer than expected to shop in stores Source: Compete Online Intelligence Survey, Spring 2012; Kantar Retail analysis - 13 - 11% WHY Buy Groceries Online? The Shopper Perspective 16% 20% 19% 20% 22% 20% 19% 18% 18% 24% 28% 29% 26% 29% 32% 31% 31% Dedicated Online Grocery Shoppers Casual Online Grocery Shoppers 40% 41% 43% 51% 54% 54%
In addition to saving money and sticking to a budget, those casual shoppers who are most likely turning to Amazon.com for some of their grocery purchases are significantly more likely to cite the convenience of home delivery and wide variety of product assortment as reasons for shopping online. At first, this point on assortment may seem like a contradiction given Amazon does not offer fresh groceries, but Amazon is incredibly successful at selling the long-tail and in the categories it sells, share often over-indexes toward brands that are sustainable, natural, organic, or cater to specialized needs (e.g., gluten-free). While Amazon doesn’t sell as many grocery categories as a traditional supermarket, it offers a much broader assortment where it plays. These findings highlight a challenge that Amazon faces overall. The “grocers” are winning the online basket, Amazon is winning one item at a time. As Amazon expands its assortment in consumables and grocery, it is looking to leverage frequency to build baskets, versus the item-merchandising (and selling) environment that it operates in today. The shopper dynamics of purchasing some items with Amazon (with low $25, if any, shipping minimums) vs. full, multi-category baskets of groceries from online grocers (typically with high purchase minimums, often $50+) are quite different. These findings highlight a challenge that Amazon faces overall. The “grocers” are winning the online basket, Amazon is winning one item at a time. Assortment. The top grocery categories purchased online are markedly different from what one would expect in a typical in-store grocery basket. Non-perishable foods and health and beauty care products top the list of categories that online grocery shoppers report purchasing, with between two-thirds and three-quarters of shoppers indicating they purchase those categories online at least occasionally. Fresh grocery categories are less commonly purchased online, edging out only niche categories (such as pet care and baby care). Even among online grocery purchasers, between one-third and one-half say they never purchase “fresh” categories online (Figure 13). However, simply looking at what’s in the basket of online grocery shoppers in the aggregate can be misleading because so many of these U.S. online grocery shoppers are shopping only Amazon.com, which doesn’t offer the fresh items one would typically see in an in-store grocery basket. Indeed, the differences are especially pronounced between those casual grocery shoppers on Amazon.com or Alice.com versus dedicated shoppers frequenting one of the traditional online grocers such as Safeway.com or Peapod.com (Figure 14). The grocery assortment of each set of retailers is reflected in what their shoppers purchase online: Health and beauty care products, non-perishable food items (tea/coffee, candy, snacks), and household essentials are the grocery items most likely to be in the online shopping carts of Amazon and Alice shoppers. Since Amazon and Alice do not sell fresh grocery items, it is not surprising that relatively small numbers of their shoppers purchase those fresh categories online. © 2012 Kantar Retail - 14 - WHY Buy Groceries Online? The Shopper Perspective
Page 1 and 2: State of the Industry: The Future o
Page 3 and 4: Foreward © 2012 Kantar Retail The
Page 5 and 6: Despite the limited penetration of
Page 7 and 8: Online grocery shoppers are on the
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Page 11 and 12: Convenience. In terms of why shoppe
Page 13: Not only does price figure prominen
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Page 19 and 20: © 2012 Kantar Retail WHY NOT Shop
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Page 25 and 26: Gen X and Y shoppers and households
Page 27 and 28: Manufacturers will need to think ca
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The Future of Online Grocery Shopping in the United ... - Kantar Retail

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