Commentary

Grocery Curb Appeal

According to Nielsen studies, food and beverage retail is the next big sector that will feel the influence of digital shopping. 23% of U.S. shoppers bought groceries online in 2016, an increase of 20% versus just two years prior, and adoption has only accelerated since then, says the report. At this rate of growth, Nielsen and the Food Marketing Institute (FMI) estimate that Americans’ total online grocery spending will reach $100 billion between 2021 and 2023.

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In order to support this growth, writes Nielsen, and address the unique challenges of online food shopping, companies are pioneering new ways of getting orders into their customers’ hands, says the report. Home delivery is currently Americans’ preferred fulfillment option, with 69% of households saying that it appeals to them in a recent Nielsen and FMI survey. But the emerging “click and collect” model (pickup from your local store or other location after placing an order online) is one to watch, says Nielsen. In fact, Millennials, who can be a leading indicator of future trends, prefer click and collect over home delivery.

Click & Collect Gaining Appeal

Appeal Of Delivery Services

% Selecting

Have groceries delivered directly

69%

Specify day/time for delivery

65%

Delivered same day as order

53

Delivered w/in few hours

50

Pick up at local store

33%

Pick up curbside

31%

Subscription for deliveries

11%

Source: FMI Survey, Convenient Delivery Options, Copyright 2017 The Nielsen Company

Are all retailers ready to offer these consumers’ their preferred fulfillment model as Millennials’ incomes and household sizes grow? Asks the report. According to Nielsen and FMI’s survey of brick-and-mortar FMCG retailers, the answer is no. One-third of retailers surveyed indicated that they are not equipped to support click and collect. What’s more, 36% don’t have a website or mobile app that enables online purchases.

According to the report, retailers can address this gap and take advantage of the demand for click and collect by focusing on three areas: 

  • Who to target, 
  • What to offer them 
  • Where to reach them

Today, four out of 10 online shoppers in the U.S. are using click and collect, according to Nielsen Homescan data. On average, they make a pickup trip every six months, and spend $58 per trip. Click and collect attracts a broader shopper base than online shopping in general, and it skews highest among middle-income families and consumers aged 18-44.

Percent of Click And Collect Share, Nielsen 

… % of online shopping households

38%

… % of online dollar spend

15%

… % of online shopping trips

16%

Source: Nielsen Homescan, 52 weeks end 7/1/2017

Nielsen Homescan data shows that, compared with all online shopping, the typical click and collect shopping basket is heavy on edibles like meat, produce, dairy and frozen foods. Dry grocery is important too: it’s included in 50% of click and collect shopping trips. 

Mass merchandisers are today’s most popular click and collect retailers, says the report, with the highest combination of online shopper penetration and sales dollars. As grocers and other retailers get in the click and collect game, they should consider implementing the model at stores in metropolitan areas, suggests the report. Nielsen Spectra mapping reveals that those locations benefit from high concentrations of nearby click and collect shoppers and are likely to deliver the best return on investment, concludes the Nielsen Click And Collect study.

For additional data and information, please visit Nielsen here.

 

 

 

 

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