In a year of record sales growth for the Canadian grocery industry, the rapid adoption of online grocery shopping has been one of the more notable shifts, said Carman Allison, vice-president sales, consumer intelligence for Nielsen in a presentation at Grocery Connex titled “Closing the Bricks and Clicks Gap: Sustaining COVID-19 Online Traction in the Omni-Shopper Journey.”
“COVID-19 has accelerated the need for online shopping, as more of us tried it for the first time and continued to come back,” he said. “Retailers adjusted quickly, and now consumers are rating online experiences higher than bricks and mortar when it comes to shopper satisfaction.”
Allison noted that online sales are leading retailer channel growth, which increased 113% in the last year, “outpacing bricks and mortar growth by nine times … and when we drill into consumer shopping behaviour fuelling online growth, we see it's due to 25% gain in shoppers. Trips increased even more so at 78%, which tells us consumers are becoming more engaged when they shop online.”
In terms of overall share of wallet, “during COVID-19 online has captured 3.4% of Canadian wallets. Basically it's doubled; it's increased 1.6 share points versus a year ago,” said Allison. “Now it seems small, but put that into perspective that each share point with their industry accounts for $1.2 billion.”
That said, online grocery shopping still isn’t for everyone. In some rural areas or lower-income households, the internet might not be accessible enough (or accessible at all) for online shopping to be a viable option. This accounts for about 15% of Canadian households, Allison said.
“Another 15% of us are technology averse; we just lack the skills, we don't understand how to shop online. Another 20% of Canadians consider themselves impulsive shoppers,” he noted, admitting this last one described himself. “I do shop online, but when it comes to shopping online for groceries, it stresses me out because I have to force myself to plan ahead to shop online, so obviously I prefer to shop in-store and make my decisions in-store.”
He calls shoppers (like himself) who shop both online and in-store “omni-shoppers,” and notes that “when you isolate the omni-shopper--and these are households who shop online and also in physical stores--the true share of wallet has almost doubled to 6.7%.”
And where some grocery departments were previously less shopped for online (such as fresh food), consumers are now trusting retailers more and have become more comfortable buying all types of food products online. In fact, there’s been a notable trend toward consumers embracing online shopping in every department across the store, with “general merchandise, pet products and baby care reporting the highest share with over 10% of sales shifting online,” Allison said.
In terms of online food sales, “a number of departments are reporting dramatic growth as consumer needs have changed. For example, baking was one of the fastest-growing departments online, mirroring the demand we saw in the physical stores. So the needs of consumers are the same, it's just a change in shopping format. As consumers start to spend more online, we'll continue to see more purchases from the e-commerce centre of store.”
Allison suggested as online grocery shopping increasingly becomes an ingrained behaviour, grocers will need to follow these “rerouted consumers” in order to successfully grow their businesses. “As consumers become more entrenched, so do expectations, which require retailers and brands to create equivalent experiences both online and offline.”