The Dawn of Online Grocery Shopping

Posted by Gunn Leikvoll on July 3rd, 2012 in , ,

Online grocery shopping is about to take off. Not in the rapid and massive way, but in a more incremental and steady fashion. At least that is what industry voices are predicting.

Chances are we’ll all be buying our groceries online in the near future. In fact, one third of consumers are already doing it. In a recent article by the Path to Purchase Institute, shopper marketing firm Integrated Marketing Services unveils the details of a study of online consumer behavior. A considerable majority of grocery trips are still happening in brick-and-mortar stores. However, the study clearly identifies an emerging marketplace for online grocery shopping. The online grocery market is in fact forcasted to grow to $25 billion by 2014, according to Nielsen.  Most of the shopping is currently taking place at Amazon.com and Walmart.com, but drugstore websites like CVS.com and Walgreens are also gaining popularity.

Why it’s different now

So, what makes the consumers want to buy their groceries online? First of all, there’s no checkout line and shoppers avoid the hassle of crowded parking lots. Many people will be more than willing to drop store trips from their busy schedules. Research conducted by Coca-Cola shows that the average supermarket trip takes 43 minutes. In comparison, an online grocery shopping only takes 7 minutes. The Integrated study suggests that price and ease of use are the strongest selling points for marketers in online grocery shopping.

But why is this happening now? In an interview with The Shopper Insighter, Darren Marshall, VP of Global Shopper Development at Coca-Cola, points out how the marketplace for online grocery shopping has changed dramatically: “From a supply chain side, the models that online retailers are using today are different and much lower cost. From a revenue stream perspective, people are now very used to interacting in a digital world.”

The Integrated study shows that Gen Y-ers (21 to 33) are becoming a true grocery demographic. Their members have a preference for digital technology that makes online grocery shopping a natural fit. Gen X and Baby Boomers can’t be left out either, as they continue to go digital.

“To remain shopper-centric, CPGs have to be relevant in offline and online environments – to treat them as a continuum,” says Valerie Bernstein, vice president, client services at Integrated. To stay ahead, marketers need to take grocery shopping into account when developing online strategies.

 What does this mean?

This means that CPGs and retailers need to plan for market shifts, otherwise they might risk losing valuable customers. Online grocery shopping will not increase consumer demand, but could lead to dramatic shifts in customer loyalty.  Stay ahead of the change and don’t fear cannibalization of in-store sales, as long as you’re the one doing the eating. But be aware of the implications. When you lose the face-to-face interaction that in-store shopping provides, be sure to still stay in touch with your customers with the tools you have. Social media is a great way to fill that need, and to keep and capture loyal customers.

Shoppers with a history of brand purchases are for example more effective in social media marketing, which is something we at BzzAgent prove to clients in campaign after campaign. That’s why we combine dunnhumby shopper insights with your target demographics profile and social influence scores to find the best advocates for your brand. These are the ones who will keep talking about you brand for a long time. This way, CPGs and retailers can effectively engage consumers and drive them to purchase- wherever that purchase may take place in the future.

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5 Responses to “The Dawn of Online Grocery Shopping”

  1. I am glad that I landed here as got to know some very informative information. Appreciate you!

  2. So glad that you liked it! Thanks for the comment :)

  3. Kari says:

    I had never thought of the idea of online grocery shopping until recently when a woman in my bootcamp class mentioned that she will be launching an online grocery store. I will give it a try once and see how I like it, but I will still want to touch and choose my own fruit and veggies.

  4. Dyan says:

    I do a large portion of my shopping online,home comfort products, pet meds, computers and cell phones, ink for the printer, birthday and christmas gifts, and once I even ordered a pair of shoes which ended up having to be returned since I wasnt able to try them on first and of course they were the wrong fit. And now for several months now 2 of the closest grocers to my home offer online shopping with home delivery. After some serious contemplation I just can’t trust someone who isnt going to be eating here for the next week to choose what my family and I will be eating. All the canned and boxed stuff would be fine, but as far as meats, bakery, and especially fresh fruits and vegs go, no way. I like to look at the rib-eyes and judge for myself how much fat content I am willing to live with, how could I ever expect someone else to meet those standards that my family and I have come to depend on. I could already hear the complaints and discontent when after ordering, say a watermelon, and it comes either over ripe or not ripe enough when I have been deemed the perfect watermelon hunter haha… I understand convenience, but honestly I feel that this is bordering on pure laziness and further disconnection of people from everyday society. To remain a functioning Society doesnt it require that we remain socially connected? We already pay all our bills online, do our banking online, get our music from downloads rather than going out to purchase that new CD, and many many college courses are conducted entirely via the web. Thousands of people have given up on meeting people the old fashioned way and now trust online dating sites to set them up with the soul mate they dream of, and mail order brides are fast competing for those same souls. Feels like people are trying to do all they can to disconnect themselves from contact with others and I just dont see the ‘big picture’ benefit of it all… 20 yrs from now church service will be all conducted online, Dr’s will have the ability to diagnose and treat people via some plug-n-play device purchased at Best Buy or even Amazon.
    I will continue going to my local grocer, run into old classmates and take some time to catch up. I will stand in line and enjoy talking with others in line with me as well as the friendly and chatty girl behind the cash register. All the while knowing that the groceries I have chosen are to my expectations and exactly what I want, and, in a week, I will be back to do it all again. Online sites will remain a convenience for items that I cant get locally or just dont really have the time to take care of with busy work schedules and the demands of a large family. More than anything, will remain an avenue for answers to questions as it was originally meant, the Information Highway.

  5. Klose vogel says:

    Loved to read informative piece of advice here,Appreciate your effort on this too

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