Online grocery shopping, spend poised to climb | Supermarket News

More than half of U.S. consumers are projected to be shopping online for groceries next year, and those who do are expected to boost their spending, according to KPMG’s 2018 Grocery Retail Consumer Perception Survey.

Of more than 2,000 grocery customers polled, 48% currently do some or all of their grocery shopping online and 59% said they plan to do so in the future.

KPMG’s research also revealed a coming change in online spending. In 2018, 17% of shoppers made more than 40% of their grocery spend online, 27% made 21% to 40% of their spend online and 56% made 1% to 20% of their spend online. Yet for 2019, 25% of online grocery shoppers expect to make over 40% of their spend online, compared with 22% shoppers for 21% to 40% of their spend and 53% of shoppers for 1% to 20% of their spend.

“While the number of consumers who are planning to shift more than 40% of their shopping online is the fastest-growing group, the majority of consumers will do less than 20% of their shopping online,” the study said. “Thus, we anticipate a barbell effect where there is an increasing number of consumers shifting significant spend online, while there is also a large group that will remain in-store.”

Price is a factor but not the main draw pulling grocery shoppers online, according to New York-based KPMG.

Among heavy online shoppers, 26% cited product assortment and 25% named product quality as the chief factor in buying groceries online. Eighteen percent cited price, followed by promotions (11%), the shopping experience (9.6%) and convenience (9.5%). KPMG added, though, that price remains key to online grocery shoppers since price transparency makes less-price-sensitive customers more price-savvy.

“As the online grocery business is exponentially taking off, grocery retailers and consumer packaged goods companies (CPGs) alike need to adapt to factors that are important to online shoppers such as convenience and choice,” according to Mark Larson, national leader of KPMG’s Consumer & Retail practice. “Already operating in low-margin environments, winning retailers and CPGs should consider innovative approaches in strategic revenue management, as well as digital and M&A strategies to remain competitive in the online market shift.”

The study also identified four customer profiles in relation to online grocery shopping for retailers and CPGs to consider when formulating their digital strategies.

The Online Pioneers are younger than 35, 80% spend over $250 per month on groceries online and 60% hold a club membership. Another notable group of e-shoppers, the Next-In-Line Adopters, does less than 20% of their grocery shopping online but plans to increase that, and they weigh product assortment as their top factor.

Read complete article here:

Online grocery shopping, spend poised to climb.