The State of Online Grocery
Online grocery sales are at record highs, with projections for 2022 estimated to reach $1.35 billion, up 41% from 2020. Our industry has shifted more rapidly in the last few years than ever before, with CPG brands and grocers optimizing their digital experience to keep pace with the omnichannel shoppers changing planning and buying behaviors. We’ve been surveying online grocery shoppers since January 2020 to keep a close pulse on industry benchmarks. Below are key learnings pulled from our recently-released third Annual Online Grocery Survey.
Online Grocery Adoption
Digital grocery is an industry that keeps on booming. In January 2020, only 53% of those surveyed reported purchasing groceries online in the past 60 days. In 2022, 72% of respondents reported purchasing groceries online in the past 90 days, a 30% increase.
Convenience is Key
As for the ‘why’ behind this growth, it’s clear that convenience, not COVID, is the main driver in purchase decisions today. This is a trend in digital grocery that has grown increasingly strong in the last year. Less than 10% of those surveyed said that “health/safety concerns” were the main reason they chose to purchase groceries online, while 46% cited “convenience and time constraints” as the top reason they buy groceries online. Online grocery this year is no longer a health precaution or a last resort, as it was for many during the pandemic; it has fully shifted to a lifestyle.
Challenges for All: Pricing and Supply Chain
While a survey conducted in October stated price was the top consideration (32%) for all shoppers surveyed when it came to repeat purchases, price is no longer top dog when it comes to driving initial online grocery purchases, with only 14% stating it as the primary driver.
Despite brands and retailers continuing to navigate ongoing supply chain issues, product availability came in as the second-most popular driver at 19%. Even these challenges can present CPGs with impressive branding and awareness opportunities to take control of the narrative. Philadelphia Cream Cheese is a prime example, who offered shoppers $20 to not include cheesecake in their holiday spreads this past season.
Digital Experiences First
Brick and mortar will never be obsolete. But with a 30% increase in online grocery shopping in the last two years, laying foundations in digital experiences is a must for brands and retailers. Especially today, the path to purchase is more blurry than ever and shoppers weave between digital and in-store. CPG marketers and retailers must consider where ecommerce purchases are happening. Retailer sites, coupon sites, and digital recipes are the top three places where consumers are motivated to purchase products from shoppable ads. The common denominator? You guessed it: contextually relevant spaces supported by shoppability.
Adoption will only continue to increase as brands and retailers prioritize digital solutions and experiences, like Patrón using NFTs to promote an ultra-limited edition bottle — usually priced around $2,200 per bottle— or True Aussie leveraging recipes to reach high-intent shoppers. Today’s shoppers are surrounded by endless advertising on a plethora of channels. This makes reaching the omnichannel shopper in engaging ways and advertising to them in the right context matters more than ever.
Interested in the latest data regarding the online grocery industry? Click here.