Grocery shopping is entering “a new era of digital transformation,” according to a new report. Now if only online promotions and prices would transform your grocery bill into something that costs a little less.
FMI — The Food Industry Association and NielsenIQ have jointly released a new report, “Digital Engagement Transforms Grocery Shopping.” It found that more than 90% of shoppers do at least some of their grocery and household-item shopping online. The report estimates that online grocery sales reached $276 billion this past year, and projects that will grow to $388 billion within the next couple of years.
So if only buying groceries online was a little more affordable.
Grocery prices are much higher now than they were back in 2020, when many people tried online grocery shopping for the first time during the early weeks and months of the Covid pandemic. And ordering groceries online often costs even more than buying them in person. So with many shoppers becoming increasingly price sensitive, they’re having to balance convenience versus cost.
And, depending on how they shop, online grocery shopping “can help or hinder shoppers’ efforts to navigate rising prices,” the report found. A majority of shoppers surveyed for the report say they get better prices in store than online. And twice as many in-store shoppers as online shoppers say they save more money that way.
Only a small minority say they actually save more by buying online – not necessarily because the prices are lower, but because they’re better able to stick to their list, they can more easily compare prices across stores, and they save money on gas.
For some, curbside pickup represents the best of both worlds – all the convenience of placing your order online, with fewer markups and none of the delivery fees. That’s helped curbside pickup overtake same-day home delivery in popularity, with 31% now preferring to pick up their own order, while preference for delivery has dropped several percentage points from the previous year, to 29% this past year.
The report’s focus on “digital engagement” doesn’t only pertain to online shopping and spending more, though. Often, a digitally-savvy shopper can spend less. More than half of in-store shoppers are using retailer websites, apps, social media and other online resources to “pre-shop,” by making lists, comparing prices and looking for deals before heading to the grocery store.
Once in the store, about two-thirds of shoppers say they use their phones to look for deals, clip digital coupons or compare prices. And if their store’s app doesn’t help them do so, many will consider going to another store altogether – about 40% say the quality of a store’s app plays a role in whether they’ll make that store their primary grocery shopping destination.
The report found that more stores are keeping their customers digitally-engaged as well, with nearly half now offering scan-and-go technology, 86% offering digital circulars (compared to 68% who still offer printed circulars), and almost all of them accepting mobile payments at checkout.
“Consumers are seamlessly blending in-store and online experiences to meet their needs,” Mark Baum, FMI’s Chief Collaboration Officer and Senior Vice President of Industry Relations, said in a statement. “Our research underscores the urgency for food retailers and manufacturers to adapt to this omnichannel reality and leverage digital technologies to enhance convenience, personalization and trust.”
It’s up to cost-conscious shoppers to determine the right combination of digital and physical – whether it’s ordering online and picking up at the store, or clipping digital coupons to redeem in store, or comparing online circulars to decide which store has the best deals that week. Higher prices for online grocery ordering may be a turnoff for some. But when it comes to best leveraging grocery retailers’ digital tools, convenience and higher cost don’t have to go hand in hand.
Image source: Publix
