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

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Digging down another level into the barriers by key demographic segments illuminates some actionable insights as we take a look at each of the five segments of barriers—price, trust/store experience, delivery issues, planning, and availability (Figure 17). Let’s start with the number one barrier, price: Female shoppers are significantly more likely than their male counterparts to cite all three price barriers: don’t want to pay delivery, prices too high, and can stick to a budget shopping in stores. This is consistent with the reason why shoppers do shop online where females are significantly less likely to shop online to save money and stick to a budget. For online grocery retailers to win female shoppers in particular (who make up the lion’s share of primary grocery shoppers in U.S. households), price perception and ability to stick to a budget are the keys to the kingdom. Online retailers will have to communicate not only competitive prices but put delivery/shipping fees into a value context in order to win her basket. © 2012 Kantar Retail WHY NOT Shop Online? Barriers to the Growth of Online Grocery Figure 17: Reasons for Not Purchasing Groceries Online, by Demographic Segment *Kantar Retail groups US households into 2 segments based on household income that also closely correlates with divergent shopping and spending behavior: “Haves” > $60K per year, and the “Have Nots” < $60K Note: Bolding/highlighting indicates significant difference between demographic segments, e.g., male vs. female (95% confidence level) Source: Compete Online Intelligence Study, Spring 2012; Kantar Retail analysis Kids in HH Age Income* Gender No Yes Under 45+ Have Haves Male Female 45 Nots Sample Size 1372 709 1171 911 1228 854 995 1087 Price Don’t want to pay delivery/shipping fees 49% 44% 44% 51% 47% 48% 44% 50% Prices are too high 25% 27% 24% 27% 24% 28% 23% 28% Easier to stick to my budget if I shop in stores 26% 18% 20% 27% 26% 20% 20% 26% Trust/Store Experience Don’t trust others to choose my produce, meat, eggs, and other items 39% 33% 31% 45% 37% 37% 36% 38% I like to explore the store and add items not on my list 34% 28% 27% 37% 32% 32% 30% 33% I enjoy shopping the store and prefer to experience in person 33% 27% 29% 34% 33% 29% 30% 32% Delivery I worry that my food will spoil/get damaged while on delivery truck 24% 27% 27% 23% 27% 22% 26% 24% I worry that my food will spoil/get damaged in the mail 24% 25% 24% 25% 26% 22% 23% 25% Delivery windows are too wide 16% 12% 14% 17% 15% 15% 15% 15% Availability No grocery stores in my area accept online grocery orders 14% 17% 14% 17% 17% 14% 14% 17% My preferred grocery retailer does not accept online grocery orders 13% 14% 12% 14% 13% 13% 13% 13% Products are not available in the quantity I would prefer to purchase 6% 5% 6% 5% 6% 6% 6% 6% I have tried shopping online, but can’t find all the products that I often purchase in the store 4% 4% 5% 3% 3% 5% 4% 4% Planning I would have to plan too far in advance 19% 17% 17% 20% 19% 18% 18% 19% I like the idea of having someone else shop for me, but it’s too time consuming to change shopping habits 3% 7% 7% 2% 4% 6% 6% 4% - 19 -
© 2012 Kantar Retail WHY NOT Shop Online? Barriers to the Growth of Online Grocery Shoppers have a slightly different perception of price as a barrier depending on their income level. While the general perception is that online grocery prices are too high/higher than in-store, the less affluent “Have Nots” have concerns more specifically about sticking to a budget. The ability to stick to a budget is one of the top reasons cited by “Have Nots” for buying groceries online, and communicating to potential shoppers how that is possible will be key to online grocery penetration for this group. Households with kids at home is the other critical factor that significantly impacts willingness to purchase groceries online. Households without kids at home are significantly more likely to cite price as a barrier, particularly as it relates to delivery fees and sticking to a budget in store. Barriers Beyond Price. Beyond price, the most-commonly cited barrier to online grocery purchasing is trust. While approximately one-third of online grocery shoppers cite the convenience aspects of saving time and not having to carry heavy items as key reasons why they shop online (the ability to outsource those selection and delivery tasks to someone else), nearly 40% of shoppers who do not currently buy groceries online are uneasy about having someone else choose their fresh groceries for them. Shoppers’ hesitations about allowing someone else to select their grocery items and the enjoyment of the store experience and exploration is particularly acute among Boomers/Seniors and shoppers with no kids at home. The conventional wisdom about being better able to pick merchandise than an employee is generationally driven. Keep in mind that many Gen Y shoppers were not taught (or have not yet learned) how to pick produce and other fresh products so the delivered product is often of higher quality than if self-selected in a store. Concerns over delivery, advanced planning required, and lack of available options round out the other barriers: One in four shoppers is concerned about food spoilage or damage during the shipping and delivery process. It would seem the ability to get shoppers to trial the process via incentives would help allay some of these concerns. Nearly one in five shoppers are concerned they would have to plan too far in advance. Communication and education about the turnaround time from order to delivery and flexibility in adjusting the order could be helpful to overcome this disincentive. Finding a solution for households with kids at home to ease the learning process of shifting habits to online can address the concern among these busy, multitasking shoppers that even though buying groceries online seems appealing, they just can’t find the time to overcome the hurdle to change shopping habits and save time on an ongoing basis. Last but not least, approximately 15% of shoppers site lack of availability from local online grocers and/ or preferred grocery retailer as the barrier. As this nascent market evolves, competitive dynamics and increased availability will erode this barrier. - 20 -
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
Page 9 and 10: © 2012 Kantar Retail - 8 - WHERE D
Page 11 and 12: Convenience. In terms of why shoppe
Page 13 and 14: Not only does price figure prominen
Page 15 and 16: In addition to saving money and sti
Page 17 and 18: © 2012 Kantar Retail Figure 14: Gr
Page 19: © 2012 Kantar Retail WHY NOT Shop
Page 23 and 24: © 2012 Kantar Retail - 22 - LOOKIN
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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