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.
According to Nielsen and the Food Marketing Institute (FMI) estimate, Americans’ total online online grocery spending will reach $100B between 2021 and 2023.In order to support this growth and address the unique challenges of online food shopping, companies are pioneering new ways of getting orders into their customers’ hands. From local delivery to ingredient subscriptions, shoppers are experimenting with them all.
Home delivery is currently Americans’ preferred fulfillment option, with 69% of households saying that it appeals to them in the recent Nielsen and FMI survey. This isn’t surprising, given that delivery has been around the longest of all digitally enabled food options. But the emerging “click and collect” model (pickup from your local store or other location after placing an order online) is one to watch. In fact, Millennials, who can be a leading indicator of future trends, prefer click and collect over home delivery, says the report.
So, as Millennials’ incomes and household sizes grow, FMI’s survey of brick-and-mortar FMCG retailers show that all retailers are not ready to offer these consumers’ their preferred fulfillment model, according to Nielsen. One-third of retailers surveyed indicated that they are not equipped to support click and collect, and 36% don’t have a website or mobile app that enables online purchases.
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 and where to reach them.
As digital technology becomes a pervasive part of food and beverage shopping, click and collect is one of many models retailers should explore to build a more seamless online-offline experience. The companies who succeed will be those that identify the right customers and locations for click and collect fulfillment, based on a strong understanding of who is most interested in grocery pickup, what they buy online and where they live, concludes the report.