Online grocery: Is Walmart giving Amazon a run for its money?
In its 2019 US online grocery shopper study, the Retail Feedback Group (RFG) found that more than half of the 1,000 US shoppers who completed its survey responded that they shopped online for groceries in the last twelve months.
About 20% indicated they shop mostly or only online for food and groceries, while 32% indicated they shop online and in-store about equally, and 48% mostly shop in-store and occasionally shop online for food and groceries. Fulfillment by pickup appears to be “picking up” with 47% of those surveyed now indicating their orders were picked up at the store (compared to 43% last year).
In addition, about four in ten shoppers indicated that they will purchase grocery items online more often in 2020, according to RFG's study.
Walmart vs. Amazon performance
This year’s research found that Walmart (37%) surged ahead of Amazon (29%) in terms of shoppers indicating the provider used on their most recent (last 30 days) online grocery shopping experience.
“As Walmart increases their focus on online grocery shopping, it appears to be resulting in more trial given the surge,” said Brian Numainville, RFG principal.
In September 2019, Walmart expanded its subscription-based, unlimited-delivery options for its online grocery shopping service to 1,400 stores and expects to have same-day grocery delivery available at 1,600 stores as well as free grocery pickup at 3,100 stores, reaching 50% of the population for same day delivery and nearly 80% for pickup.
While Walmart may be leading the charge in customer trial, the efficiency and user experience of using Amazon beats out Walmart and according to RFG, overall satisfaction increases with repeat usage.
When it comes to overall customer satisfaction with online grocery shopping, Amazon registered the highest score on a five-point scale (five being the highest) with a score of 4.60, a drop from last year when the online retailer scored 4.70. Walmart also dropped in customer satisfaction from 4.54 last year to 4.45 this year, according to RFG.
Amazon scored “significantly higher” in a number of key touchpoints of the online shopping experience including the ease of the online checkout process, the website/app working smoothly during the whole process, availability of items, prompt and efficient delivery, and the items being packaged well when receiving their order.
RFG also pointed out that other supermarkets/food stores are performing well, registering the highest number of first-time users (22%) compared to 18% and 9% for Walmart and Amazon, respectively.
“At the same time, supermarkets/food stores also appear to be gaining ground in increased overall satisfaction, as compared to last year, and now register the highest percentage of first-time users, showing positive momentum for the channel.”
Online shopping for fresh items becomes more accepted
Ordering fresh food items online is becoming more common, overcoming a common hurdle for the industry as many consumers have historically preferred to select their produce, meat, or dairy in-person.
In last year’s study, the findings illustrated increased levels of purchasing fresh food items by online grocery shoppers. This growth appears to be holding with fresh food departments registering double digit online sales growth in produce (41%), meat (36%), bakery (35%), deli meats & cheeses (32%), prepared foods & meals (26%), and seafood (14%) in 2019.
“Based on the study findings, it appears that shopping online for fresh items is now a more accepted part of the online grocery shopping experience. This growth may be a combination of a broader cross-section of shoppers engaging in online shopping, as well as more experience by online providers in successfully meeting the expectations of consumers in these departments,” said Numainville.
“At the same time, among those shoppers not giving top marks for meeting standards for quality and freshness, produce is the department with the highest percentage of mentions (45%).”
Doug Madenberg, RFG principal added, “These results show that the growth and maturation of online grocery shopping continues to erode the advantage once held by the shopping experience at a physical store."