Online Grocery vs. Digital Grocery: What’s the Real Difference?
Today, 72% of shoppers have purchased groceries online in the last 90 days. The number of online grocery shoppers in the U.S. is projected to reach 163 million by 2024, over double what it was in 2018. It’s clear that online grocery is seeing some major growth, but consequently, so is digital grocery.
How do online grocery and digital grocery compare?
Online grocery — or grocery ecommerce — refers to the actual grocery transactions that occur on grocery retailers’ owned e-commerce platforms. This encompasses all on-platform actions, such as browsing PDPs on the retailer’s website, adding products to cart and checking out — whether for delivery or BOPIS.
Digital grocery is the multitude of digital environments that today’s omnichannel grocery shoppers move through to get to the end purchase point. This can include grocery retailers’ e-commerce sites, but also can start as early in the shopper’s journey as the inspiration stage with digital recipe sites and social media.
Unequivocally, the two grow in tandem.
Why does this difference matter?
The distinction matters because it represents our industry’s shift in mindset. Grocery ecommerce only focuses on the end goal, while digital grocery considers the entire customer journey. In today’s state of online grocery, looking beyond the retailer’s website is key to actually engaging in the macrocosm of digital grocery.
According to a recent survey, 58% of respondents have visited a grocery retailer’s website or app in the last 60 days. However, the biggest driver to visiting the retailer’s website was to search for sales, not to actually buy groceries. CPG brands and retailers who are not considering the big picture of digital grocery are missing out on incremental ecommerce transactions.
Additionally, 80% of respondents who purchase groceries online are likely to repeat purchases. When CPG brands focus on the full lifecycle of the digital grocery shopper, they’re more likely to benefit from the increased lifetime customer value of digital shoppers.
Digital grocery is no longer a nice-to-have to reach consumers and meet goals, but a must-have for CPG brands and retailers alike. For either constituent to truly reap the benefits of digital grocery, they need to understand and leverage contextual commerce as part of their advertising plan.
Finding Success in Digital Grocery for Retailers
For retailers, this means pairing retail media network strategies with off-platform contextual commerce strategies. Off-platform strategies target new and lapsed customers earlier on in the path to purchase. Paired with RMN campaigns, which focus on owned channels, retailers are able to meet shoppers at different stages in the path to purchase and drive greater incremental traffic and sales.
“The retailers who can provide marketers the ability to connect digital campaigns, whether on-site or off-site, to in-store results or vice versa, [...] will appeal not only to their CPG partners but also to their customers,” Yuni Sameshima, CEO and Co-Founder of Chicory shared with Forbes.
Finding Success in Digital Grocery for CPG Brands
For CPG brands, the key to finding success in digital grocery is leveraging true shoppability by positioning commerce-enabled media within the right context. Consider where shoppers are already browsing online, well before the shopper lands on the retailer’s site.
In the world of grocery, this means in-recipe advertising. A recent survey reveals that of respondents who had not visited a grocery retailer’s website, 51% had still shopped for groceries online, meaning that they had done so via third-party apps or digital food content, like a food or recipe blog. As the number one driver of new product trial year-over-year, recipes need to be incorporated into the contextual commerce strategy of any CPG brand looking to find success in digital grocery.
Inspiration, product use cases and buying experiences all constitute digital grocery. The retailers and CPG brands who consider the ecosystem of digital grocery instead of focusing solely on grocery ecommerce will successfully minimize friction from the path to purchase and find greater success with the 2022 omnichannel shopper.
To learn more about advertising within digital recipes, reach out to hello@chicory.co.