E-Commerce to Become Larger Factor in Near Future: Study

Most food retailers expect online grocery shopping to be a real source of competition, but the question is, when will they need to respond? This was one of the issues addressed by a recent study by retail research firm Brick Meets Click.

The third section of BMC’s 2013 grocery report, “Six Degrees of Digital Connection: Growing Grocery Sales in an Omnichannel World,” examines online grocery shopping, how shoppers are using it today, and how the future of online grocery may unfold over the next 10 years.

“The results show that when shoppers regularly go online for groceries, there’s a good chance that 40 percent to 45 percent of their grocery spending will move online,” said Bill Bishop, chief architect of Brick Meets Click. “We’re seeing more shoppers in many markets try the online option. As soon as that happens, brick and mortar retailers need to offer an online option or watch a big chunk of their business move out of reach.”

The report is based on analysis of more than 22,000 grocery shopper surveys. Among the findings:

• Of shoppers who bought groceries online in the last 30 days, 46 percent bought online just once, 23 percent bought online twice, and 31 percent bought online three or more times.
• Share of spending increased with frequency of purchase: Customers buying just once did 17 percent of their grocery spending online, while those buying three or more times online did 42 percent of their grocery spending there.

Brick Meets Click forecasts that in 10 years, 10 to 17 percent of all grocery spending could move online, based on market-specific scenarios developed from the study findings.

The report, which will be released next month, covers three questions that are crucial to senior grocery management as they contemplate a future in which daily newspaper circulation continues to shrink, mass media is less effective and efficient, and digital connections have become a permanent part of shoppers’ lives:

• How does expanding the number of digital connections relate to increased sales?
• What needs to be done to pull the digital connections together into a communications program that encourages shoppers to spend more?
• Where are shoppers today in their interest and engagement in buying groceries online and how is this expected to increase in the future?

Brick Meets Click is a strategic resource for retailers, suppliers and technology providers who want to make insightful decisions about meeting shopper needs in the digital age.