Consumers are buying more groceries and other consumer goods online, and retailers like Walmart have responded, expanding curbside pickup and offering incentives for shoppers to pick up items to cut costly last-mile delivery prices. But are grocery retailers doing enough to entice consumers to change their shopping behavior?
Nearly 90% of online orders of fast-moving consumer goods (FMCG)—from household products to grocery items—are still shipped to the home. Just 8% are fulfilled via in-store pickup, and another 4% via curbside pickup, according to Nielsen’s 2017 “Digital Shopping Fundamentals” survey, which polled more than 37,000 US grocery shoppers.
While there’s some promise—many consumers surveyed said they would consider picking up their fresh or perishable items curbside—there are still some retailers that are missing the opportunity to meet the growing grocery ecommerce demand. In fact, more than a third don’t offer an online shopping option at all.
And that option is critical, because online sales of food and consumables are expected to rise an average of 25% each year through 2021, after jumping 24% to $33 billion last year, according to the “2017 Future of Food Retailing” report by Inmar Willard Bishop. It projected online grocery sales will grow to 8% of the industry total by 2021, up from 4% in 2016.
Nielsen’s latest consumer survey showcased that growth potential. More than two-fifths to nearly three-fifths of shoppers said they have bought nonfood and nonperishable items, including health and personal care items, pet products and snacks, digitally. While the adoption rates for perishable fresh and frozen food are still much lower, they signaled some appetite. More than one in 10 shoppers said they’ve bought those perishable categories online.
Interestingly, with consumers’ growing demand for options that spell convenience, 20% of online orders involve subscription services for things from meal kits and chips to toilet paper and dry dog food, according to Nielsen.
“Given the hundreds of decisions we’re forced to make every day as a result of … data overload, many consumers are using subscriptions as a means to automate and streamline their lives,” the study said.
Like in other non-CPG categories, getting online business right is not just about meeting growing consumer demand. According to the Inmar Williard Bishop study, online orders are typically as much as five times larger than brick-and-mortar ones. When shopping a retailer that provides an online option, households that buy both online and in-store spend 29% more than households shopping in-store only.
This article originally appeared eMarketer Retail.