Touchy Consumers Morgan Stanley surveys in both 2016 and 2017 found that 84% of consumers reported that they didn’t buy…
Online grocery shopping is the trend that has everyone in the FMCG and CPG business talking. From Amazon’s purchase of Whole Foods and introduction of 1 hour delivery to the rapidly growing popularity of online grocery shopping in Asia, if you follow the FMCG industry at all you’ve no doubt heard a lot about this already.
In spite of the seemingly unstoppable momentum of online grocery shopping, most consumers have been resistant to changing the way they get their food. A recent Gallup poll found that 84% of Americans have never bought groceries online, and that 81% bought groceries at a supermarket or other store at least once a week.
Let’s take a look at 5 reasons why the average consumer isn’t buying groceries online (yet).
Morgan Stanley surveys in both 2016 and 2017 found that 84% of consumers reported that they didn’t buy groceries online because they preferred to see, touch and choose their food before purchase. Consumers are especially picky about produce, and have difficulty trusting the selection of fruit and vegetables to others. You might want ripe tomatoes and green bananas, or vice-versa. Companies have worked hard to meet the needs of consumers (see this Instacarttraining video where specific rules are given for selecting bananas “The perfect banana is yellow with green at the tips. For larger quantities pick ones that are less ripe. If the customer orders 15 bananas, they’re going to need more time to eat them” says the instructor) but it will take time, testimonials, and positive experiences to build trust.
This might go hand in hand with squeezing an apple and sniffing a melon, but so many of our cultural traditions and family memories are bound irrevocably to food. You can probably remember trips to the shop with a parent or grandparent and the thrill of choosing a sugary cereal or packet of crisps. People cherish these memories of shopping, and want to build them with their children. In addition to parking lots full of cars and rage inducing self-checkout lines, there are also lovely memories and traditions in grocery shopping that we are reluctant to throw away.
We tend to think of convenience as simply the easiest or fastest way of accomplishing a task, but many people would also equate it with stress-free shopping. For the increasing numbers of people who live alone in urban centers, is it more pleasant to log onto a website, or pop around the corner to the shop? For a parent needing to whip up a stress free dinner after work, is it easier to order ingredients on Amazon and turn them into a meal, or just order a pizza? Do you find it more stressful to draw up a list of the things you’ll need a week in advance, or just run to the local Tesco’s when you’re out of milk or ketchup? Online grocery shopping enables consumers to get groceries from the store to their house with a minimum of physical effort. But it needs to make the customer experience seem easy, stress-free and natural before it truly catches on. The technology to make this happen is emerging, but consumers need time to get comfortable with it, and brands need to make it seductively easy to use.
According to Morgan Stanley’s 2017 poll, 26% of shoppers who don’t buy online reported that “products online are more expensive than in a physical store” as their reason. Lydia Saad, Gallup senior editor and advanced consultant, agrees, stating that “Food can be one of the biggest line items in people’s household budget, and going to the store — including comparison shopping among stores — may afford more control over getting the lowest prices.” While prices may even out over time, customers love deals, and they like the freedom to seek out sales and promotions rather than accepting whatever prices Amazon or Sainsbury’s offer through their apps.
The same Morgan Stanley poll found that 27% of traditional grocery shoppers said “I tried it and didn’t like it.” The remarkable thing about this number is that in 2016 only 17% of those polled cited this as a reason for not buying groceries online. This reaction could be discounted as the knee-jerk conservatism of hide-bound traditionalists, enraged by legions of delivery boys treading on their lawns, but if more than a quarter of consumers are dissatisfied with a service, those providing it should work very hard to get to the root of the dissatisfaction.
While there is certainly reason for concern in the industry, we are still extremely optimistic about the future of online grocery shopping. As Linda Saad of Gallup wrote in her report on their findings “services like PeaPod, Instacart, Shipt and Amazon Fresh that cut out the trip to the grocery store appeal mainly to those short on time: parents with children younger than age 18 and employed adults,” she said. “Higher-income Americans are also bigger adopters of grocery delivery, either because higher income means they can afford more groceries or they have greater access to mobile technology like smartphones and tablets that make ordering online easier.” These are certainly valuable and growing demographics.
Another factor to take into account is the promise of new technologies. Digital Assistants and apps/skills like Adimo Voice will eliminate many of the headaches associated with ecommerce, helping to close the convenience gap. Others will allow consumers to monitor sales and check prices from a variety of retailers before purchase. Blockchain could allow consumers to track their produce or meat purchases from farm to table, allowing consumers to access all of the information they desire about the food they’re buying. While online grocery shopping is a work in progress, progress is being made!