Research shows 38% of all shoppers who ever bought groceries online did so for the first time in the last month.”
IRVINE, California — Pandemic-driven changes in online shopping behavior will have an enduring impact on grocery e-commerce, according to industry leaders participating in “Emerging E-Commerce Trends: Before, During and After,” a webinar hosted by Advantage Digital Technology, April 28, 2020.
Many brands’ and retailers’ pre-pandemic e-commerce priorities have become more urgent — and new priorities have moved front and center — as they respond to the dramatic changes in grocery shopping patterns, according to panelists Lisa Blizzard, senior manager e-commerce and customer communication for Continental Mills; Andrew Schydlowsky, founder and CEO of TrackStreet; Jennifer Silverberg, CEO of SmartCommerce; Robb Powell, president, e-commerce services for Advantage Digital Technology; and Steve Strong, executive vice president and general manager for Quiverr, an Advantage Digital Technology company. The webinar was moderated by Kelsey Weber, senior manager, strategic initiatives, for Sage Tree LLC, an Advantage Digital Technology company.
The e-commerce experts offered these key insights during the webinar, which was viewed live by more than 400 attendees:
Brands and retailers continue to navigate the in-store and online grocery buying surge and related supply chain issues — and are uncertain about their impact on long-term sales and brand loyalty.
For Continental Mills, pantry-loading pushed triple-digit increases in sales at brick-and-mortar stores, which created numerous out-of-stocks, especially in mixes, Blizzard shared. “On the flip side, the foodservice channel has taken a hit, so we’ve had to change priorities.
“Demand has leveled off a bit, but we continue to see a significant increase in both brick-and-mortar and online sales,” she said. “Communication with [retailers] is exceedingly important. Our logistics team keeps us updated on out-of-stocks multiple times a day.”
While packaged food sales typically fare well during a recession, “it’s hard to predict if sales will soften as consumers begin using the products in their pantries,” she added.
As more shoppers move online, more purchases are starting at a brand website, Silverberg said. “But we’re also hearing about loss of brand loyalty as customers buy whatever is available.”
Pre-pandemic, when online shoppers encountered out-of-stocks, they would accept a substitution 3% to 7% of occurrences. Now substitutions happen for 34% of online shopping orders, she noted. “The greater rate of shoppers substituting items is happening across all categories, not just those we’d expect.”
Nearly half (46%) of shoppers who tried a new brand due to an out-of-stock, re-purchased that new brand, Powell noted.
Out-of-stocks, delayed delivery and website crashes are hurting the online grocery experience now — but may not impact new shoppers’ plans to stick with online platforms in the future.
“Our research shows that 38% of all shoppers who have ever purchased groceries online did so for the first time in the last month,” Silverberg said.
When asked how they expected to grocery shop in the future — offline only, a mix of online and offline, or entirely online — 63% of first-time online grocery shoppers said they’d do both. “Just 20% said they’d return to brick-and-mortar-only buying and 17% said they would move to online-only shopping,” Silverberg said.
The shift to online shopping comes when more than 60% of online shoppers surveyed said they didn’t get their order in the time promised and 30% had at least one order canceled outright, she noted.
Still, shoppers have quickly lowered their expectations. Amazon Prime customers soon saw standard delivery times move from two days to four weeks, Strong noted. “But as people moved to shopping from home, their expectation of what ‘immediate’ meant changed.”
To counter poor online experiences, brands should be monitoring reviews, revamping their online Q&A content and ensuring the right people are selling their products online, Schydlowsky advised.
Brands and retailers should move now to engage shoppers who are new to online grocery shopping.
For Continental Mills, there is a sense of urgency around click-and-collect, as the platforms increased from 3% of sales to percentages potentially in the double digits, Blizzard noted.
The consumer goods company pulled much of its second-quarter marketing and promotion activity due to out-of-stocks but plans to invest those dollars in the third quarter and fourth quarter when demand is likely to soften. “We’ll be focusing on click-and-collect opportunities at the individual retailer level and looking at opportunities such as sampling to encourage trial,” Blizzard said.
As online orders and digital enablement of orders increase, brands have a new opportunity to interact with these shoppers, Powell said. “This could mean new content deployed to the digital shelf, new advertising practices and keywords, and maybe new types of online questions and answers.”
Schydlowsky added: “Brands need to ask themselves: ‘What do I want my brand to represent [during this time]? What are the pieces that directly affect our ability to sell online?’ [Customer sentiment] is changing so quickly, but these are things brands can control.”
Lessons learned now will pay off after the pandemic.
“The biggest lesson we have learned so far is that being nimble is essential,” Schydlowsky said. “We all have an opportunity in the future to move more agilely based on data.”
Silverberg is advising her clients to pay attention to the local grocery retailers who are winning in the e-commerce space now and “increase those partnerships.”
Powell said: “Retailers are rationalizing SKUs and want fit-for-purpose SKUs. Commerce is being powered by digital, warerooms and dark stores and initiatives like Panera delivering groceries. As data becomes more reliable, retailers will hyper-localize their product set and that may call for different pack sizes or product sizes.”
Quiverr leaders have learned the value of being nimble in the supply chain to get product where it is needed, Strong said. “We’ve had some brands calling us to see if they could pack their first-party products for third-party sales and send it back to them.”
At Continental Mills, leaders have learned “What you do now, matters,” Blizzard said. “Don’t wait.”