Shoppers Are Buying Perishables Online

ALEXANDRIA, Va.—Nearly half or more of all shoppers go online to purchase meat, produce and other perishables, according to a global study reported in Forbes, and within a year, the study predicts, one-third of shoppers will spend more than 40% of their grocery budgets online. This change in shopping patterns is requiring supermarkets to upgrade the services they deliver, both online and, in some cases, in their stores.

The average American household spends more than $7,700 a year on food (about $640 a month), so there is much for supermarkets to consider. Traditional grocery stores are investing in online ordering and seeking new ways to capitalize on their investments in real estate. The result is more immediate and personalized online fulfillment, plus retail locations that are striving to be eclectic and easier to shop.

Shoppers expect personal treatment wherever they shop, including online. Of the 4,000 consumers surveyed in December 2018, 68% said customer service is important when digitally shopping for groceries, and these are the services they like:

• 59% of shoppers want digital apps that provide in-store product locators.      
• 60% say mobile loyalty apps help their shopping trips.
• 66% would like to have personalized communications loaded directly to their rewards cards. Yet only 46% of food retailers do so.

As shoppers move into online shopping for perishable foods, those items will get more scrutiny. Retailers should expect the following:

• 48% of consumers said they do or plan to purchase meat within 12 months of the survey.
• Roughly 55% buy or will buy deli items, dairy, bakery and frozen foods.
• 53% buy or will buy fruits and vegetables.

What’s making online perishables so popular? Amazon, through Whole Foods, helped remove some of the barriers to online ordering. Amazon Prime members have access to free two-hour delivery on orders over $35 or can pick up their food from Amazon Lockers located at Whole Foods stores.

Yet even as shoppers buy more groceries online, they still expect physical stores to meet more of their needs. Grocery leader Kroger has been quick to respond by testing driverless grocery delivery in Houston, offering designated online order pickups at most stores and providing customers with a “Scan, Bag, Go” self-checkout app.

Other study findings are:

• 58% of shoppers said if grocers reduced space, it should be in non-food items; 28% think stores should cut back center-aisle packaged products. Only 19% suggest reducing space for fresh foods, such as produce, meats and dairies.
• Consumers are getting less picky about where they buy. Shoppers spend about 72% of their grocery budget with their primary store. That means 28 cents of every $1 is spent elsewhere, which could include dollar stores, convenience stores and community shops that meet cultural and social niche preferences.

Some chains, such as Target to Hy-Vee, are planning smaller stores and replacing grocery square footage with in-demand services. Target’s small-format stores carry flexible selections of what’s most in demand in the market. In California, the chain Raley’s operates Market 5-One-5, a store dedicated to healthy eating, and Hy-Vee is adding medical facilities and spa-inspired bath boutiques, according to a report in The New York Times.

These services, when offered with app-enabled digital services, could provide the holistic answer to the spontaneous shopper’s fleeting considerations to grocery shopping, online and instore.