Texas-based store chain H-E-B ranked as the top eCommerce grocer in the U.S., narrowly edging out second-place Amazon and third-place Amazon Fresh, according to dunnhumby’s eCommerce Retailer Preference Index (RPI).
Data research firm dunnhumby conducted a comprehensive, nationwide study examining the emerging $100 billion U.S. eCommerce grocery market.
The study ranked Walmart fourth and Sam’s Club fifth. Kroger, BJ’s, and Sprouts had the following highest scores in the Retailer Preference Index, with all three finishing in the top tercile.
“H-E-B’s impressive performance proves that it’s possible to compete and win against Amazon when it comes to grocery e-commerce. Their success offers mid-size and regional retailers a roadmap on how to succeed online,” said Grant Steadman, President of North America for dunnhumby.
“H-E-B’s eCommerce journey goes back to 2015 when they first started with curbside pick-up, and they have since built up a powerful online ecosystem. The combination of a simple and easy-to-use shopping experience with a fantastic emotional connection with customers shows how grocers can thrive in this multichannel landscape,” added Steadman.
According to dunnhumby, the overall RPI rankings are the result of a consumer survey-informed statistical model that predicts how retailers execute on the customer needs that matter most for driving eCommerce performance and emotional bonds with online shoppers.
The eCommerce RPI methodology calculates eCommerce performance through a composite score of Change in Web Visits (2019 to 2021) from SimilarWeb, Share of Wallet Online, and Online Penetration of a Retailer’s Total Shopper Base.
Retailers’ preference driver and emotional connection scores were gathered from a customized, online survey of 3,000 U.S. households that shopped online at least once in the 30 days before being surveyed. The five drivers of customer preference for eCommerce are: 1) owned digital asset usage, 2) ease and reliability, 3) substitutes, 4) product, 5) price.
Key Findings From the Study:
- H-E-B captured the top ranking in this inaugural study due to several factors, including boasting the highest level of emotional connection and online share of wallet among their customer base out of all the retailers studied.
Although they were relatively new to offering online shopping compared to Amazon and Walmart, H-E-B customers were the ones that migrated their spending online the most after the pandemic hit, increasing their grocery spending online by 27%, which resulted in H-E-B having the highest share of wallet online. - The eight top-performing retailers in this study all have well-established eCommerce capabilities, and most of them also have scale and size as a critical competitive advantage. Scale and scope allow them to have more funds to invest in eCommerce and greater operational efficiencies.
In addition, first tercile retailers have an evident strength in their digital assets versus mainly relying on intermediaries. They have achieved a higher adoption, with three out of five customers shopping on these assets during their last online trip. This has likely given retailers more significant control over the customer online experience. - Unlike the dunnhumby U.S. Grocery RPI that ranks prices as the most important customer preference driver, for eCommerce success, the most important drivers are:
1. Owned digital asset usage.
2. Ease and reliability because they have the strongest positive correlation with customer sentiment and eCommerce performance metrics. This means that banners that scored highest on these two drivers also had the most robust emotional and eCommerce performance in this study.
Walmart, Amazon, and Amazon Fresh are the top-ranked retailers for owned digital asset usage. For ease and reliability, Sam’s Club, Amazon Fresh, and Aldi are the top three retailers. - Retailers who lean more heavily on intermediaries have lower scores for the ease/reliability customer preference driver, higher bounce rates, and fewer pages/visits.
In these cases, customer loyalty is with the retailer, not the intermediary. Instacart, Shipt, and Door Dash had lower emotional connections than nearly every grocery retailer measured. - Omnichannel shoppers look very different from brick-and-mortar shoppers and are more likely to be motivated by the caregiving of children and pets.
Omnichannel shoppers, which can be up to 40% of all shoppers, are defined as customers who purchase with a retailer across multiple channels. Thirty-eight percent are between the ages of 25-54 and have at least two children. They buy online twice monthly, with three out of every five visits to a retailer grocer occurring online.
On average, they spend $531 per month across all the stores they shop and $131 per month – 25% of their share of wallet – with a single retailer.
In contrast, brick-and-mortar-only shoppers are at least 50% of a retailer’s shopping base. Fifty-seven percent of them are 55 and up and are either empty nesters, retirees, or both. On average, these shoppers spend $382 per month across all the stores they shop and $111 per month – 29% of their share of wallet – with a single retailer. - Covid accelerated grocery growth for eCommerce, but it may have just brought the grocery sector closer to its eCommerce sales ceiling at a faster rate rather than raising the height of that ceiling.
Rising inflation, a subsiding pandemic, and increased consumer mobility are putting the brakes on eCommerce growth.