Cleveland — Online grocery shopping is gaining momentum, with 11 percent of shoppers regularly purchasing some grocery products online, according to a report from researchers at Brick Meets Click. Further, they suggest, that trend will grow to 17 percent of total grocery shopping within a decade.
The report, “Six Degrees of Digital Connections,” notes online interaction between grocery retailers and consumers is expanding. For example, although 70 percent of shoppers refer to printed circulars, more than half that number (37 percent) regularly use the digital format. Seventy-one percent receive emails and 79 percent get food retailers’ text messages. Perhaps more important, when twice-monthly online shoppers shop online an additional time in the same month, share of total grocery spending increases to 42 percent.
“Traditional retail isn’t going away,” The Hartman Group Director of Marketing & Communications Blaine Becker tells Candy & Snack TODAY. “Consumers like to buy and browse online and see different products, but with certain products such as food, they want to touch, feel, see and quantify them.” A Hartman Group study, “The Online Grocery Shopper 2013” reports candy and snacks, personal care and tissue products are top online purchases.
“Where people shop — online or in the store — is based on whether they have what you’re looking for, whether this product meet your needs,” he continues, adding that delivery time and costs are decisive factors in consumers' choice of venue. For an item needed right away, it could be cheaper and faster to drive to a store than to order online.
In fact, a United Parcel Survey of online shoppers reported most will not wait more than seven days to receive their purchases, and delivery date and cost were the most important information given during checkout. More than half (54 percent) have abandoned the transaction because the shipping price made the total price more than expected.
To recapture those shoppers and gain the competitive advantage in serving customers faster and cheaper, Amazon.com, Inc. is spending $13.9 billion on fulfillment expenses, including five new distribution centers in the U.S. this year, as reported on Bloomberg.com last month.
However, Becker suggests savvy retailers should pay attention to what successful online retailers are doing and consider how it can be adapted to their company. He explains: “Companies such as Amazon.com and Wal-Mart Stores, Inc. have the scale to be the leaders in online retail. That said, lots of retailers — and manufacturers with online stores — need to examine their distribution models in light of what Amazon and Walmart are doing.”
Distribution and online retailing aren't the only areas in which Amazon and Wal-Mart are setting a brisk pace. Walmart is in its second year of its “Get on the Shelf” online program in which entrepreneurs submit products they hope the retailer will carry, and consumers vote for their favorites through the web site. Five finalists receive an opportunity to consult with Walmart’s merchandising team and have their products carried online and in certain stores, and a grand prize winner is selected from the five on the basis of online preorders for its product. This year, the retailer plans to use a reality-series format of webisodes to for the voting process.