Progressive Grocer Independent

OCT 2014

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18 | Progressive Grocer Independent | October 2014 Industry Survey Online Shopping for food items. More than one-third (36 percent) picked the items up at a local store, and 11 percent had the items delivered from a local store. Shopping Frequency For the 38 percent of consumers sur- veyed who do shop online, their online shopping frequency remains low, with only 5 percent buying online once a week or more. Te highest percentage (20 percent) buy online less than once per month. Eight percent buy a few times per month, and 5 percent buy once per month. When asked about their likelihood of shopping online for supermarket items in the next year, half indicated their frequency would be "about the same," while 33 percent indicated "more often" and 17 percent "less often." Online shopping still has a long way to go before it becomes a primary method of food shopping. What supermarket products are consumers buying online? Te top category was natural and organic (55 percent), followed by health and beauty items (49 percent), special dietary needs (46 percent), nutritional supple- ments (44 percent), nonfood items (36 percent) and grocery items (34 percent). Notably, fresh departments fell signifcantly further down the list. Te surveyed online shoppers were concerned about fresh department pur- chases like produce. Te top concern was freshness (82 percent), followed by damage (53 percent) and products too ripe/not ripe enough (46 percent). "Te biggest fear I have ordering online is how is it going to arrive … [W]ith fruits and vegetables I think I might pay a small premium more if [a profes- sional] was hand-selecting them," one panelist said. If fresh products like pro- duce are part of the ofering of a digital grocery service, freshness concerns must be addressed for retailers to earn the trust of shoppers. Reasons Against Online But for the nearly two-thirds of consumers not buying online, why aren't they? Topping the list was the perception that prices were higher than in-store (53 percent), poor qual- ity (36 percent), and the inability to fnd specifc items, sizes or varieties (22 percent). Any retailer considering ofering shoppers the ability to order online needs to think about how to overcome these hurdles. Interestingly, the security of personal information was a concern of only 16 percent of shoppers, despite all of the recent news stories about data breaches at major retailers. Finally, again illustrating the slow pace of adoption of online ordering of food items, those shoppers who hadn't purchased super- market-type items online in the past year also weren't too likely to do so in the next year, with just 3 percent indicating it was "very likely" and 29 percent indicating it was "somewhat likely." In the end, independent retail- ers need to carefully consider the role they'll play as digital grocery services continue to emerge and expand. One advantage is the legacy of trust built in the local community. Trust is paramount when it comes to shoppers' engagement with digital grocery services. As one panelist at our session said, "Online is a great opportunity … I just don't know who I can trust … I'd like to fnd them." I would argue that her local independent retailer is exactly what this customer needs to fnd. PGI Independent retailers need to carefully consider the role they will play as these digital grocery services continue to emerge and expand. One advantage is the legacy of trust built in the local community. Why Consumers Don't Buy Online Reason Cited Percent Higher prices than in stores 53 Poor quality 36 Lack of variety 22 Security of personal information 16 Categories Purchased Most Frequently Online Category Percent Natural and organic 55 Health and beauty 49 Special dietary needs 46 Nutritional supplements 44 Nonfoods (e.g., paper goods) 36 Ethnic/international items 25 Bakery 21 Produce 14 Prepared foods and meals 12 Deli meats and cheese 11 Meat/seafood 10 Floral 9 Other 8 Brian Numainville joined Retail Feedback Group (RFG) in 2012 as a principal, after spending nearly 20 years with Nash Finch Co. He's also a frequent contributor to industry conferences, publications and web forums. He can be reached at [email protected] retailfeedback.com.

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