Grocery Channels Continue to Blur: KRS 2016 Consumer Study

The third annual Consumer Insights research survey conducted by retail design firm King Retail Solutions (KRS), in collaboration with A.R.E. | POPAI, highlights the continued evolution of category blurring across retail channels.

The survey sampled over 1,200 diverse U.S. residents including Millennials, Gen X’ers and Baby Boomers about their shopping habits and attitudes toward a multitude of retail sources. With three years of data available, the focus the 2016 study focuses on year-over-year analysis, new trends and ongoing shifts in consumer preferences.

Once again, the 2016 survey dives into the growing trend of category blurring. Quality and selection continue to increase in importance for purchases of fresh meals, groceries, and apparel. A new area of attention for the 2016 reserach study focused on special occasion purchases highlighted as a growing trend for a wide variety of retailers.The study also provides in-depth analysis of how key demographic variances (age, sex, family status, income levels) play a role in practices and attitudes.

A breakdown of KRS study highlights include:

Online For In-Store Pickup

• 54% of U.S. shoppers find the option to buy merchandise online for in-store pickup appealing and have done so in the past 12 months. That’s up 14% from 2015 responses. 34% said they would purchase groceries online for in-store pickup.
• 40% of men would buy groceries online for in-store pickup while only 29% of women would do so.
• 47% of Millennials, 33% of gen x, 21% of baby boomers (big generational spread!) would buy groceries online for in-store pickup.

Grocery Category Blurring

• 65% of U.S. shoppers bought groceries from a non-grocery store in the preceding 12 months and 91% would consider doing so in the coming 12 months. As income increases, so does the likelihood of having purchased groceries from a non-grocery store.
• Canned/boxed foods are the grocery category most likely to have been purchased from a non-grocery store.
• Big box stores and dollar stores are the retailer types consumers are looking to most frequently for their grocery purchases (from non-grocery stores).

Whether at a grocery store or another type of retailer, KRS consumer panelists ranked their decision-making factors in choosing where to purchase groceries as follows:

1. Cost

2. Quality

3. Selection

4. Convenience

5. The shopping environment/experience

6. Access to non-grocery items also sold

Fresh Meals Category Blurring

• Aside from restaurants, grocery stores are the most popular outlet consumers are turning to most frequently for their fresh prepared meal purchases.
• Kroger (#2), Albertsons/Safeway (#6), Publix (#7), Ahold (#9) were the top grocery store brands ranked for fresh prepared meal purchases among KRS study participants.

Special Occasion Category Blurring

• Big box (51%), dollar stores (47%), and grocery stores (40%) are the most popular outlets KRS survey panelists turn to most frequently for their special occasion purchases.
• Kroger (#5), Albertsons/Safeway (#7), and Ahold (#12) were the top grocery store brands ranked for special occasion purchases, including flowers, balloons, gift wrap and greeting cards.

Retail Subscription Services

• 28% of U.S. shoppers have participated in an ongoing “subscription” retail purchasing agreement in the past 12 months – up 6% from 2015 responses.
• What’s interesting here in terms of grocery is that the #1 retailer mentioned among subscribers is Amazon, whose pantry penetration is rising as a competitor to traditional grocery stores.
• Other retailers offering grocery items by subscription include: Target (#4), Walmart (#6), Graze (#8), Naturebox (#11).

For more information or to download the full report, click here.