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

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3. Prepare for a World Where Habits and First-Mover Advantage Matter As shoppers find the optimal balance between online and in-store grocery shopping, patterns will evolve and retailers and suppliers must adjust their strategies and tactics to remain relevant. Critical among these skills is understanding list formation in order to influence shopper behavior both online and in-store. Lists start with categories purchased. As noted earlier, all categories are not created equal; fresh categories account for a much larger proportion of the total basket online. In fact, for one multi-channel grocery store player, each of the top three selling categories online represent more than double the share of sales from the top three selling categories in the bricks and mortar store (Figure 21). As online assortment expands and shoppers develop their own category preferences by trip type, monitoring this balance between the online and in-store basket will be critical to developing comprehensive shopper marketing programs. It is critical to begin understanding the dynamics of your category in online grocery as first-mover advantage matters. When many rankings and site visibility hinge on “best sellers,” breaking into shoppers’ consideration set is an arduous task. Online habits are also quite “sticky”—shoppers who purchase a number of other categories are more likely to expand their category consideration set and once items make it onto the list, it is very hard to get shoppers’ attention. When all it takes is four clicks for many online grocery shoppers to complete their order, there is not much opportunity to interrupt, no less influence, the purchase decision. Each of the top three selling categories online are more than double the sales of the top 3 selling categories at the bricks & mortar store © 2012 Kantar Retail Figure 21: Top Categories: ‘Fresh’ Online vs. ‘Traditional Grocery’ for Bricks & Mortar #1 #2 #3 #4 #5 Source: Kantar Retail ShopperGenetics®, 52 weeks ending 3/2012 Online Grocer B&M Retailer #1 Fresh Market Meat Fresh Market Produce Fruits Fresh Market Produce Vegetables - 25 - LOOKING FORWARD: Where Do We Go From Here? % of Total Sales by Category Milk B&M Retailer #2 (Premium) 7.8% 3.3% 3.9% Bread Fresh Produce 6.0% 2.8% 2.6% 5.9% 2.7% 2.5% Soda Potato Chips Coffee 3.5% 2.5% 2.3% Milk Cereal Canned Vegetables 3.4% 2.5% 1.8% Milk Cheese Yogurt
Manufacturers will need to think carefully about how their products make it onto shoppers’ lists online and how baskets are built. This is an area today that is not well understood in the preparation for the store trip, no less online. Understanding this process and the key factors influencing the shopper at this point of decision will be a critical skill set that must be developed. Among the factors that affect list formation, manufacturers have varying degrees of influence. Fortunately, there are a few key online list influencers that shoppers rate as relatively important and that manufacturers have some ability to influence (Figure 22). 85% 80% 75% 70% 65% 60% 55% 50% © 2012 Kantar Retail Recently purchased items Items from replenishment list I keep Figure 22: Influencers of List Formation for Online Groceries Ingredient for specific recipe Ability to search to meet minimum purchase requirement Item featured as bestseller Source: Compete Online Intelligence Survey, Spring 2012; Kantar Retail analysis Manufacturers will need to think carefully about how their products make it onto shoppers’ lists online and how baskets are built. - 26 - LOOKING FORWARD: Where Do We Go From Here? Brands/items I am loyal to Nutritional attributes of items Item requested by Customer reviews other HH members Items advertised on site Suggestions based on customers who bought similar items Featured as new item Item listed 1 st /at top of page Items for which there are deals/coupons/promos Average =69% Manufacturers' Ability to Influence Low High
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 and 20: © 2012 Kantar Retail WHY NOT Shop
Page 21 and 22: © 2012 Kantar Retail WHY NOT Shop
Page 23 and 24: © 2012 Kantar Retail - 22 - LOOKIN
Page 25: Gen X and Y shoppers and households
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