Before the dreaded COVID-19 virus dramatically altered pretty much everything about our lives, people were already migrating to online platforms for their grocery shopping and health-care needs. While the percentage of the overall market was still fairly low in FMCG (approximately 4% of purchases in the US and 7.5% in the UK), the online sector was growing 4x faster than brick and mortar, and estimates had it on-track to capture $400 billion in revenue by 2020. With approximately 25% of the world’s population currently in lockdown, and the vast majority of the rest doing their best to practice social distancing and avoid crowded places, the virus’ impact on the way we shop has already been staggering. Adimo has analyzed the trends and patterns which are dramatically changing the way we do business as the global health crisis necessitates a “new normal.” Click the link to view our recent webinar on the subject, or read on to know more!
Analysis of sales data coming from Asia in February and March found that, somewhat predictably, massive growth was experienced in sales relating to personal hygiene and non-perishable foods. Brandwatch and Brand IQ have recorded data showing that online sales of hand-washing products spiked by well over 200%, while online grocery purchases increased by 102% (bear in mind that this occurred in societies where online’s share of the total market is significantly higher than in North America or Europe). The biggest sales boosts were in canned goods, beans, pasta, sanitary products, and vitamins, all of which experienced digital sales growth of at least 200%.
In the West, what data we have suggests that online grocery shopping is poised for explosive growth, with shoppers eager to stockpile necessities without experiencing the stress and possible virus exposure that would accompany trips to the supermarket. Double and triple-digit FMCG sales growth has occurred in virtually every major European and North American market. As in Asia, non-perishable foodstuffs and products for cleaning and sanitizing homes and body parts are highly sought after.
The numbers could be even higher if Amazon and other online retailers had infrastructure that could keep pace with consumer demand. Observers have likened trying to find delivery time-slots in urban areas to a game of whack-a-mole, leading software developers to create tools to automatically refresh pages until they find open delivery slots. Even then, customers have reported that items in their carts are selling out and disappearing as they wait for the chance to schedule a delivery. In fact, the estimated year over year increase in Amazon Fresh orders has jumped from 139.4% in January to 323.2% in March according to Quartz and Rakuten.
With most retailers who aspire to be major players in the online FMCG space announcing plans to hire thousands of new workers, including 100,000 new staff members at Amazon, 30,000 at Instacart, and 20,000 at Tesco, it’s clear that this growth isn’t likely to be a flash in the pan. All of the current trends and changes indicate that the COVID-19 crisis is likely to drive exponential growth in the online FMCG sector.
Analysis of popular search terms tells us that consumers are hungry for food with a long shelf life that can be purchased online. There has been a 450% increase in searches for “store cupboard recipes”, and a 300% increase in searches for “how do you make bread” and “batch cooking recipes.” Meanwhile, the search terms “online food shopping” have experienced a mind-boggling 3500% growth recently.
At Adimo, the data we’ve collected has demonstrated the increased popularity of shoppable recipes, a concept we’ve long touted, which have the benefit of both entertaining and educating consumers as they experiment with shopping online. We’ve seen a 198% increase in consumers using shoppable recipe related content to plan meals, a trend which dovetails with a 489% increase in users choosing to shop online rather than offline. We’ve also noticed that travel restrictions put in place as Europe locked down have led to a significant spike in demand, which has driven conversion rates to climb. We’ve concluded that many shoppers who used to explore new products online before purchase have become significantly quicker to pull the trigger on purchases, perhaps in anticipation of scarcity.
A Nielsen survey conducted as China re-opened for business has provided us with some interesting numbers. Even as Chinese retailers have re-opened 99% of physical stores, consumers are demonstrating a marked reluctance to visit crowded places, with 87% of respondents stating that they would continue to avoid public spaces whenever possible. This has led analysts to dub the emergent reality “the homebody economy”, a brave new world in which consumers shop, study, work, and find entertainment options without venturing outside. One consequence of this is that online shopping has doubled even as supermarkets are almost all back in business. As Beijing based film producer Emma Wang notes “Personally I am not thinking of rushing to the malls now. I have HEMA supermarket for all daily essentials delivered to my apartment now.”
Our world is changing, indeed it has already changed dramatically in the past few months. While no one can say with certainty exactly what the new normal will be, we know that the brands that emerge strongest from the COVID-19 crisis will be those nimble and agile enough to adapt their platforms, supply chains, and marketing strategies to changing consumer desires and expectations. Because we at Adimo have spent years building campaigns and platforms around shoppability, seamless online experiences, and the digital shopping paradigm, we can get you primed for success in a drastically changing retail landscape. If you’re ready to lay foundations for success in the years to come, get in touch with us today!