Why digital matters now
Grocery shoppers aren't just buying things online. They're also making purchasing decisions that affect your business.
The milkman is back, but this time he’s gone digital. Seven per cent of Canadians have ordered grocery products online for home delivery in the last six months, and more than 48% are willing to do so in the future, according to Nielsen research.
If you run a supermarket, don’t despair. Stores still have many advantages over e-commerce. First, they are remarkably convenient places to shop for food, toiletries and other consumables that people often need right away. Also, we still love to shop in person. Nearly half of Canadians (49%) say going to the grocery store is an enjoyable experience, and more than one- third (39%) think a trip to the supermarket is a fun family outing.
So, why be concerned with digital? The answer is simple. The enormous amount of time spent online now influences how people shop, regardless of whether they buy online or in a store. To affect your customers’ path to purchase, you must connect with them digitally.
To understand, let’s first look at the path to purchase. Touchpoints along the way include writing shopping lists, comparing prices, researching products and reading reviews. Once upon a time, these activities were done offline: paper shopping lists and flyers, signage and simple word of mouth.
Today, however, digital is becoming a go-to source for consumers to connect with retailers and CPGs. Think mobile coupons, shopping apps, list apps, social media, self-serve checkouts and in-store Wi-Fi. Use of self-service checkouts (33%) and online/mobile coupons (14%) are the most-cited forms of in-store digital engagement among consumers today, with more than half willing to use these in the future (50% and 56%, respectively), according to a recent Nielsen survey. Seven per cent of respondents have downloaded a retailer/loyalty program app to receive information or offers, and 47% say they’re willing to use one if and when it’s available.
A big reason CPG is going digital is that the first generation to grow up online is becoming an important grocery shopper. Millennials are reaching their 30s and starting to have their own kids. Even their younger siblings, generation Z, are turning 20. Both grew up buying books and music on the Internet. Ordering groceries online makes perfect sense as well.
No wonder usage of six e-commerce options (home delivery, in-store pickup, drive-thru pickup, curb-side pickup, virtual supermarket and automatic subscription) is greatest among younger people. Thirteen per cent of millennials (ages 21 to 34) say they now order groceries online for home delivery, compared with 8% of generation X (35 to 49) and less than 1% of baby boomers (50 to 64) and the silent generation (65 and up) respondents.
That Canada’s major food retailers are launching e-commerce options is another reason consumers are starting to buy groceries online. A noteworthy statistic: 2% of Canadians now use an automatic online subscription service in which orders are routinely replenished at a specified frequency, and more than one-third (38%) are willing to do so in the future.
If you think online stores are merely a digital version of real stores, think again. Virtual baskets don’t always mirror physical ones. Generally, stock-up categories such as personal care and household products are prime selections for e-commerce shoppers, while immediate-use items, such as fresh and frozen foods, condiments and beverages, are still often bought in stores. It may take longer for people to get comfortable buying these foods online.
Still, the path to purchase for CPG is swinging ever toward digital. As it does, retailers and CPGs must make a connection with consumers long before they get to the store. Don’t wait to sit back and see what the future will hold. The milkman is back. The future is now