The Intersection of Technology Apps and Grocery Purchases

By: Phil Dance, Alter Agents

The evolution of shopping apps proves to be the biggest growth trend with Millennials and their grocery shopping behaviors. According to data collected from our Shopper STAT study, which interviews 1,000 grocery shoppers each week, 43 percent of Millennials report using some kind of mobile app to grocery shop – either to help them prepare a list, search for coupons or check for store sales ahead of shopping. The growth of shopping apps is staggering and continues to be on an upward cycle. 

According to Flurry, a prominent mobile analytics firm, shopping app usage grew faster than any other category of apps last year, an impressive 77 percent to be exact. Sessions on shopping apps on iOS and Android devices increased by 174 percent year-over-year (between 2014 – 2015), including 220 percent on Android alone.

Savvy shoppers are using apps to find more and more creative ways to save money, stay organized and take the pain out of grocery shopping. One of the most popular apps reported by several interviewees was Ibotta. According to Tech Crunch, Ibotta helps consumers looking to save on grocery items and other purchases with opportunities to earn cash rewards for interacting with brands. Users tap buttons on each rebate they prefer, then answer a quiz or survey questions, read a fact about the product, get a recipe, share the item on social media, watch a short video, and more, in order to redeem their savings.

Ibotta has also seized this opportunity to help shoppers plan their shopping endeavors by adding a shopping list feature that works with more than 150,000 stores across the United States. To date, Ibotta’s “any brand” program has delivered more than $25 million in cash rebates to shoppers, but it still requires that users browse through the list of rebates and select them in the mobile app.

Who are these mobile app users? Utilizing data from the Shopper STAT study, it was clear there were several common characteristics among typical mobile app users, including:

• A higher percentage of grocery app users are female compared to non-app users (78 percent vs. 73 percent)
• They are more likely to have at least a bachelor’s degree or higher compared to those who don’t use apps (38 percent vs. 31 percent)
• They are more likely to be in a committed relationship (either married or with a significant other) – 67 percent vs. 58 percent of non-app users

In addition to these planning and saving apps, consumers are also turning to grocery delivery services such as Instacart, Amazon Fresh and others. These services have seen remarkable growth over the last two years and while some may question their ability to sustain growth and viability, it’s important to understand this shift.

Why is it important that grocers seize this shift in the consumer relationship from shopper’s loyalty cards to apps and other services?  The benefits of these apps are clear in their ability to help shoppers save, organize and get their groceries. In a fascinating story on Forbes.com, Barb Stuckey explains the importance of embracing the shift, quoting, “He who controls the relationship with the consumer controls the game. When a consumer stops visiting his/her local grocer and shifts their shopping to Instacart, they are now sharing credit card numbers, purchase pattern behaviors, and eyeballs with Instacart. This represents a huge loss for bricks and mortar stores who charge food companies money for the space on their shelves, based on the fact that they are the ones with the consumers.”

Grocers are in a great position to leverage these new technologies combined with their network of stores and distribution in order to deliver on the shifting needs of consumers. These services cannot be treated as a separate entity to traditional bricks-and-mortar business, in much the same way consumers won’t treat their experience with a Safeway.com differently from a visit to the Safeway store. If they have a bad experience with one, it will reflect poorly on the brand as a whole. With this in mind, grocers – and others – have an opportunity with apps and other technology to create even more touchpoints with their customers.