US shoppers still prefer grocery stores over online
Online grocery is making solid gains in the US but still accounts for less than 5 per cent of sales in the $800 billion industry, according to a recent study. TABS Analytics 6th Annual Food and Beverage Consumables Study conducted in August 2018 examined consumer buying patterns across 15 consumables categories.
“Growth in virtually every category of food and beverages examined in this year’s study can be attributed to two underlying trends: more buyers purchasing those products and heavy buyers increasing the amount of those products that they purchase,” said Dr. Kurt Jetta, president and founder of TABS Analytics.
“Online retailers still have a lot of ground to make up to see the same kind of penetration we’ve seen in other markets, such as vitamins and products for children.”
Despite a 4-point year-over-year increase, the number of regular online food and beverage purchasers is only 17 per cent. Only 38 per cent of consumers shop in the format even once, and well under half of the shoppers (44 percent) are loyal to the format.
“The stated loyalty rates of online grocery shopping are well below the 75 per cent level needed to ensure a viable, successful business model,” stated Dr. Jetta. “This format has a long way to go to achieve a stable demand; until then eComm grocery will be relying on having to invest in expensive trial-generating activities.”
Everyday low price remains the favored tactic, growing in popularity among those aged 18-34. Households with kids were less likey to shop around for better deals, opting for convenience instead.
Interestingly, demand for organic and diet products waned, indicating that they are not likely to become anything greater than niche markets in the US. Only 13 per cent of consumers said they try to purchase organic while low-calorie products showed a significant 4 percentage point year-over-year decline, indicating that it’s not as big a priority for consumers as in the past.