Why Digital Shoppers Are the Key to Increasing Lifetime Customer Value
In the last two years, we’ve seen online grocery adoption — by consumers, brands and retailers — vastly accelerate. Today, 58% of consumers shop for groceries online in some capacity and 63% do at least part of their meal planning online. As there are more online grocery shoppers, CPG marketers need to factor them into their advertising strategies more than ever by understanding how and where they make decisions.
The Better of Both Worlds
Not only are online grocery shoppers now more prevalent, but because of the way they shop and plan, their loyalty is much stronger than that of the traditional in-store shopper. According to a survey conducted by Chicory, 84% of all shoppers surveyed had specific brands in mind when creating their shopping lists, but when it came to online shoppers, 93% of them did. In January 2023, 52% of shoppers report brand familiarity as a top driver of online brand selection.
Not only that, but the loyalty of consumers who leverage digital technologies is stronger across the entire shoppers’ journey than that of in-store only or even omnichannel shoppers.
Even as we look at the start of the shopper’s journey, there’s a clear distinction in which shoppers are the most loyal. Shoppers who plan offline — via pantry checks, cookbooks or manually writing their lists — appear to be the least loyal to brands. Inversely, online planners — who use shopping list apps, meal planning apps or digital recipes — were six times more likely to be loyal to brands than offline planners. Online-only shoppers are 14.7 times more likely to be loyal to the same grocery store than in-store shoppers. For shopper marketers looking to support their retailer of choice, this makes winning the online shopper more important than ever.
Additionally, as U.S. consumers are faced with record-breaking inflation rates, it’s beginning to show through their shopping habits. In the land of loyalty, price is a top dog. 32% of all shoppers stated that price was the top consideration when it came to repeat purchases and 39% of online shoppers’ store loyalty is driven by price.
Hook, Line and Shopper
While the store loyalty of the online shopper is exponentially higher than that of other types of shoppers, non-retailer sites remain key to the omnichannel shopper's journey. A significant portion of digital meal planning and shopping occurs before shoppers even go to their preferred retailer website. Of shoppers who had not visited the retailer's website or app in the last 60 days, the majority (57%) still did their meal planning online, but not on the retailer's platforms.
According to Epsilon, “88% [of shoppers surveyed] were only reachable off-site because those people simply didn’t visit the retailer’s site.” The lack of visiting the retailer’s site highlights not only missed grocery purchases but what are becoming mainstream digital planning behaviors today. Shoppers are looking across the web for inspiration: 89% of shoppers use digital recipe content and 81% are likely to repeat previous grocery shopping orders. Combine these digital-savvy behaviors with the repeat purchasing behaviors of the digital shopper and one thing becomes abundantly clear: digital shoppers hold the largest customer lifetime value.
While on-platform strategies remain top of mind for many CPG marketers and shopper marketers, the opportunity cost is honing in on the higher customer lifetime value of the digital shopper. These loyal, digital-savvy customers are shopping across the web, from TikTok trends to digital recipes. This leaves a plethora of lost opportunities to convert moments of planning and inspiration into opportunities for actual grocery transactions through contextual advertising. Layering shoppability onto these moments of meal inspiration is not just a nice-to-have for brands but rather can make a big impact on product add-to-carts and, in time, customer lifetime value. It has never been more important for CPG brands to reach shoppers beyond the retailer’s platforms — in-store and online alike.
Reaching shoppers earlier in their shopping journey and in the right place is key to increasing customer lifetime value. Thus, with digital shoppers proving to be the most loyal shoppers, prioritizing reaching them is a must for the modern CPG marketer. Meet them at the point of inspiration with contextually relevant advertising and easy-to-use technology to make their buying journey seamless.
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Chicory’s contextual commerce approach combines contextual advertising with shoppable tech— driving sales for the world’s leading CPG brands and retailers. Want to know more? Give us a shout!