Article Courtesy By Jim Dudlicek / NGA Director of Communications and External Affairs
With year-over-year online channel sales up 17% and vastly outpacing in-store growth, read all about omnichannel for grocers in 2024 to understand better omnichannel shopper behavior, which is vital for retailers of all sizes. As independent grocers, how can you better understand today’s omni shoppers?
In a recent webinar hosted by the National Grocers Association, experts from Nielsen IQ offered valuable insights and a preview of the top channel-shifting trends and consumer dynamics to watch in 2024.
The presenters – VP and Omni Industry Leader Ken Cassar and VP of Omni Solutions Stacey Maniscalco – explored changing shopper behavior trends across channels, retailers, and platforms and their impact on loyalty; key differences among generational cohorts and underlying behaviors; and top trends to watch for in 2024 to help you stay on top of the rapidly evolving shopper behavioral changes and key differences in channel choice across generations.
Related Article: Why Omnichannel Shoppers are the Best Clients?
What’s clear is that “Omni shopping” is here to stay, with emerging channels chipping away at the grocery stores and mass stock-up-trip dominance since the turn of the 21st century. How will you tackle the omnichannel for grocers as the new normal that will influence your success?
Here are some key takeaways from the discussion:
Online sales now account for 17% of CPG sales, growing 7 points faster than in-store sales. Food lags but is making headway; food is at 9% but has increased 18% YOY, compared to 8% in-store growth. Online CPG sales are far less dominated by food than in-store (34% vs. 71%).
Online buying rate growth is driven by continued significant growth in occasions per buyer. The rate growth has been far more critical than in-store, accounting for a substantial portion of the continued shift to online – up 13% in-store and 51% online.
Online shopping penetration has stabilized. Food and household care have seen the most significant growth, with the online buying rate increasing significantly across all departments, powered by growth in shopping occasions.
Online Sales after COVID
Since COVID, online has grown its share of food sales. While the pandemic forced consumers to stock up and retailers to scramble online, post-COVID consumers are reverting to their fragmenting ways. Fragmentation of trips post-COVID was entirely limited to in-store purchases. Online trips remain dominated by “spearfishing” (shopping planned around a handful of specific items).
In-store pickup accounts for a larger share of fresh, frozen, and refrigerated food sold online, but the trend is toward delivery: 48% delivery vs. 52% pickup. While under indexing against brick & mortar, fresh, refrigerated, and frozen items account for a surprisingly large share of online sales: 32% online vs. 40% in-store.
Spearfishing trips have stolen the most significant share of stock-up trips’ decline. Unique online strategy for sales is critical to win in this space, with spearfishing dominating the channel.
Younger generations are leading the online charge. Gen Y is leading the push toward online. While Boomers lag, Gen Y’s online spending outpaces all other generations in all departments. Gen Z spending online is accelerating faster than any other generation as they age into earning power and place new value on convenience.
Amazon’s weak flank is store-based retailers’ strength. Amazon’s challenges in delivering fresh and frozen goods create opportunities for store-based retailers to provide full-basket solutions to shoppers.
Tracking the omni shopper is more critical than ever. Brick-and-mortar views need to improve as more buyers expand and stay online. An engaged panel is crucial for tracking shopping behavior. Don’t settle for good enough when managing your business and determining how to allocate your budget online and offline.