Online grocery shopping on the rise and should be a 'wake-up call for all brick-and-mortar retailers'

By Mary Ellen Shoup contact

- Last updated on GMT

©GettyImages / Kritchanut
©GettyImages / Kritchanut

Related tags: ecommerce, Amazon, Walmart

Roughly half of current online shoppers reported that they plan to purchase grocery items more often in 2019 with increased purchases of fresh food items, according to the 2018 US Online Grocery Shopper Study conducted by The Retail Feedback Group (RFG) revealed.

Consumers also expressed a growing overall satisfaction with the customer experience provided by online retailers.

The study was based on a nationally representative sample of 760 respondents who shopped online for food and groceries in the last 30 days.

Fresh food purchases on the rise

Compared to results from its 2017 study, US online shoppers increased the number of fresh food items purchased including year-over-year increases of produce (+50%), meat (+40%), deli meats and cheeses (+50%), and seafood purchases (+46%) -- see chart below.

FreshFoodGrowth
Source: RFG

They are also doing so increasingly on web browser through their smartphone or tablet (+23%) or through the and iPhone of Android app (+14%), whereas desktop web browser online grocery shopping dropped 63% in 2018 compared to 2017.

“The willingness to purchase fresh items in higher frequencies than last year illustrates that providers are improving in their ability to overcome objections that historically have been limiters in these areas. While there is still room for growth, this finding provides encouraging news for retailers and others offering online food shopping services,"​ Brian Numainville, RFG principal, said.

However, when asked to name a department in which consumers experienced dissatisfaction, about a quarter named (26%) named meat.

About eight out of ten online shoppers (81%) indicated that quality was the top factor they consider very important when purchasing meat online, followed by price (65%) and proper handling/refrigeration during delivery (53%). Among those who do not purchase meat online, the top reasons given were wanting to select meat items themselves (63%) or concerns that meat products might not be refrigerated properly during delivery (55%). 

Satisfaction by online retailer

Consumers are faced with a growing amount of options in online retailers who are all competing to win over customers. 

RFG_onlineshopping
Online Grocery Shopping By Age Group

According to RFG’s survey, consumers' overall satisfaction (rated on a five-point scale) with ordering food and grocery items online was highest with Amazon (4.70 score), followed by Walmart (4.54), and a score of 4.36 for supermarkets/food stores with their own online delivery platform.

Instacart, which fulfilled delivery of nearly one-third of all online grocery orders, also scored higher than supermarkets/food stores, the survey showed.

Despite Amazon ranking the highest in customer satisfaction, the online retailer saw a 36% drop in the number of users between 2018 and 2017, compared to Walmart which grew its customers by 26%.

"Clearly Amazon, Walmart, and Instacart are taking advantage of both their experience in the space, and the capital they continually invest, in improving the online grocery ordering and fulfillment experience,”​ Doug Madenberg, RFG principal, said.

Instacart, for example, recently raised $600m​ in a funding bringing its total capital raised in the last year to $1.6bn.

“Supermarkets and food stores operating e-commerce on their own, or through a third-party platform, should take note of Instacart's scores and ensure their service provides an experience at the same or higher level." 

Many respondents surveyed that in-store grocery shopping tended to offer better product selection and feeling “valued” as a customer by providing better customer service.

But online retailers are catching up in these areas especially in the area of convenience, and brick & mortar grocery should take note, Madenberg noted.

"It's no surprise that online grocery shoppers find their experience more efficient and convenient.  But the fact that online shoppers find the experience both more enjoyable and more pleasantly surprising than an in-store visit should be a wake-up call for all brick-and-mortar retailers," ​Madenberg said.

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