In online grocery shopping, Amazon and Walmart continue to lead this market, although the growth of supermarkets/traditional grocery stores is significant compared to the two retail giants.
Walmart surpassed Amazon in online grocery sales, according to the 2019 US Online Grocery Buyers Study, prepared by Retail Feedback Group (RFG), a consumer research firm based in Lake Success, New York.
The firm surveyed 1,000 American consumers who made online grocery purchases in the last 30 days. 37% cited Walmart (compared to 32% in 2018) and 29% named Amazon (compared to 31% a year ago) as the preferred place.
Supermarkets were the online grocery shopping destination for 22% of those customers. Other online grocery providers saw their share drop from 15% to 12% a year ago, according to RFG. Also, supermarkets registered the highest percentage of shoppers (22%) indicating first-time use for online grocery shopping, compared to 18% of Walmart and 9% of Amazon.
“As Walmart increases its focus on online grocery shopping, it appears to be resulting in more trial given the surge in shoppers reporting using Walmart for their most recent online grocery shopping experience, beating out Amazon,” said RFG Director Brian Numainville in a statement.
“At the same time, Supermarkets/Food Stores also appear to be gaining ground in increased overall satisfaction, as compared to last year, and now register the highest percentage of first-time users, showing positive momentum for the channel,” Numainville added.
In terms of customer satisfaction when shopping for groceries online, supermarkets gained ground from leaders Amazon and Walmart, which experienced a decline according to the 2018 RFG study.
On a scale of 1 to 5, Amazon scored 4.60 (a drop from 4.70 in 2018), while Walmart scored 4.45 (a decrease from 4.54 in 2018). Supermarkets/food stores improved to 4.43 from 4.36 in 2018.
The Online Grocery Shopping Experience
The RFG study reviewed 12 critical points of satisfaction of the online grocery shopping experience, including ordering, fulfillment and people elements, by a significant provider.
Amazon shoppers rated six of the twelve aspects of the online shopping experience significantly higher as compared to how Supermarket/Food Store shoppers and Walmart shoppers rated their providers.
Walmart shoppers did not rate any element significantly higher for Walmart than Amazon shoppers rated these elements for Amazon.
“Interestingly, shoppers with orders fulfilled by Instacart have an overall satisfaction score of 4.58, similar to that of Amazon, and higher than both Walmart and Supermarkets/Food Stores,” said RFG. Of the 53% of shoppers who indicated their order was fulfilled by delivery, approximately one-fourth of those had deliveries that were handled by Instacart.
Amazon had the lowest percentage (3%) of online food shoppers who didn’t receive all the items they ordered, compared with 5% for Walmart and 8% for supermarkets/food stores.
Overall, more than half of the shoppers completing the survey tried or shopped with only one online grocery provider in the last twelve months. About 20% indicated they shop mostly or solely online for food and groceries, while 32% indicated they buy online and in-store about equally, and 48% mostly shop in-store and occasionally shop online for food and groceries. Fulfillment by pickup appears to be “picking up,” with 47% of those surveyed now indicating their orders were picked up (compared to 43% in 2018).
Online Shopping Vs. Brick and Mortar
The RFG investigation revealed that consumers are seeing fewer differences between buying groceries online and in physical stores. Although online has an advantage in terms of convenience and stores have a quality/freshness advantage, 50% or more of consumers found that both types of purchases are the same for seven of the 12 factors measured.
The generational differences in online food purchases have also vanished, with Baby Boomers reporting a higher level of customer satisfaction (4.56) than Generation X (4.48) and Millennials (4.45).
“These results show that the growth and maturation of online grocery shopping continue to erode the advantage once held by the shopping experience at a physical store,” according to RFG director Doug Madenberg.
However, produce is the main department that did not meet the quality expectations for online shoppers. 45% of respondents cited products that did not meet their quality standards, followed by meats (26%), central store (25%), frozen products (23%), and dairy products (22%).
About eight out of ten online shoppers (82%) indicated that freshness was the top factor they consider very important when purchasing bakery online. Among those who do not buy bakery online, the top reasons given were wanting to choose bakery items themselves (57%) or those bakery items might not arrive fresh (45%) or have a reasonable shelf life date (36%). Bread and cookies were the top items shoppers indicated purchasing online.
“Shopping online for fresh items is now a more accepted part of the online grocery shopping experience,” added Madenberg and Numainville. “This growth may be a combination of a broader cross-section of shoppers engaging in online shopping, as well as more experience by online providers in successfully meeting the expectations of consumers in these departments.”
A great advantage for all online food providers: customers tend to buy more than initially planned. Of those surveyed by RFG, 39% said they were attracted to purchase additional items.
The top reasons were “noticed it was on sale or a good value” (62%); “noticed it was new or interesting” (34%); remembered I needed the item(s) while placing my order (31%); noticed it was fresh or in-season (18%), or the site/app recommended the item(s) based on my cart or prior purchases (17%).