Being in the grocery industry for over 20 years, it’s intriguing to me to see that my son tends to be the one who grocery shops and cooks! He loves watching the Food Network and various cooking shows as well as trying new ingredients and recipes. He even “plates” their food for dinner! Now that the baby is here, I wondered how their grocery shopping might have changed, especially now that maternity and paternity leaves are over, making their time more challenged with two careers.
Similar to what Valassis’ recent Coupon Intelligence Report revealed, they are among the millennial parents who generally spend over 50 hours a week working and commuting (68%). In order to manage an optimal work-life balance, he and his wife have become big fans of buying groceries online. They have also used curbside pickup on a few occasions and have tried meal kits from Blue Apron as much as three times a week, but now might only order once a month, and only if they see an interesting menu offering. Many millennial parents are seeking these options for convenience – in the past year, 63% have increased shopping at stores due to services such as delivery or pickup. This is one way grocers are meeting shoppers’ expectations and life-stage needs.
Convenience reigns supreme with 66% of online grocery buyers saying they shop online because it saves the most time. My son tells me the bulk of his grocery buying is via home delivery from a website, like Peapod, for that very reason. According to Valassis’ Coupon Intelligence Report, 41% of online grocery buyers also use these types of websites for their online grocery needs once or several times a week. Since his order total is updated with each item he adds to his online cart, he can also manage his budget better. While there is a delivery fee, he can save on the fee by selecting a more optimal delivery time. This is an interesting marketing approach as savings is also valued among online shoppers.
Online grocery shoppers are coupon advocates, with 65% using them always or very often compared to 45% of all consumers. There is an opportunity for marketers to attract the online grocery shopper as 62% find it frustrating when they can’t use coupons or discounts. My son stated that it would really appeal to him if retailers offered an app loaded with coupons relevant to the products he buys in store or online.
Since my son and his wife live in a suburban area west of Chicago, there is no shortage of places to grocery shop but he typically only shops in store to buy a handful of items. Interestingly, the brick and mortar retailer within less than 2 miles of his home, recently launched digital promotions/coupons tied to past purchase behavior but it might be too late for my son to change (and they offer delivery). He has developed his weekly grocery shopping habit and it’s primarily online.
Yes, it’s true the bulk of grocery buying is still done in store, but the growth projection for online grocery is incredible. Big grocery chains and even smaller independents are testing, learning and launching online ordering with delivery or curbside pickup options. That leads me, the industry geek, to think that it’s really the grocer’s game to win or lose, especially with younger generations and young families!
Retailers have the opportunity to leverage enhanced targeting to reach the best potential (and lifetime) users for their online offerings. Grocers must tap into intelligence that combines online and offline shopper behavior to guide their media strategy to find these high potential online grocery shoppers.
Once identified, they must market to them repeatedly, via mobile and online, and consider print as well. The Coupon Intelligence Report revealed that approximately 60% of online grocery shoppers always or very often look at both print and online circulars in deciding which retailer to shop, perhaps because promotions are different by retailer and are updated each week. It’s important that these shoppers are exposed repeatedly as new services are being offered that align with their shopping preferences. Once they have developed the online grocery habit with another retailer, it will be especially hard to get them to switch. And given grocery shopping is a weekly trip that adds up to $6,0001 on average per household, per year – that’s a customer worth pursuing and winning!
1IRI CSIA, Total U.S. all outlets, total store spend, Latest 52 weeks ending March 24, 2019