How Technology is Changing Grocery Shopping, From the Consumer Perspective - September 6, 2018 1pm ET #GroceryTrends Conference line: 866-269-6685 ...
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How Technology is Changing
Grocery Shopping,
From the Consumer Perspective
September 6, 2018
1pm ET
#GroceryTrends
Conference line: 866-269-6685
Conference ID: 9680617
International Dial In: +1-647-427-3128
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#GroceryTrends 2
Meet your presenters
David Fikes
Steve Markenson VP, Communications &
Director, Research Consumer/Community Affairs
Food Marketing Institute Food Marketing Institute
Doug Baker
Vice President, Technology
Food Marketing Institute
#GroceryTrends 3
Research background
For more than four decades, FMI has been tracking the trends of grocery shoppers
in the U.S., taking note of where they shop, how they shop and what issues are most
important to them as food shoppers. For the past four years, FMI has partnered with
The Hartman Group to conduct this research.
Methodology
Quantitative Research Qualitative Research
• A 25-minute online survey among n=2,136 U.S. • In-depth 1-on-1 interviews with shoppers from 4 multi-
shoppers aged 18 and older, responsible for at person households and 1 single-person household in
least 50% or more of the grocery shopping in the Baltimore area, including home tours of kitchens
their household and food-storage areas, as well as shop-along
interviews in frequented food retail locations
• Fielded February 4-16, 2018
• Five 1-on-1 virtual interviews with shoppers across the
• Additional analysis includes U.S. Census,
nation, augmented with a homework exercise using
Bureau of Labor Statistics
photos and words for shoppers to show what “eating
well” means to them and how shopping supports these
needs
• Fielded in October 2017
#GroceryTrends 4
Overview of 2018 findings
2017 2018
➢ Channel fragmentation ➢ Online has evolved from a grocery channel to a
continues, with grocery touchpoint
ecommerce gaining users • Older shoppers are adopting and younger shoppers are
discovering a future that differs from industry assumptions
➢ Shoppers evaluate a food retailer by how well it
➢ Transparency means supports their overarching goal of eating well
context beyond the • Individualized and grounded in occasions, eating well
package includes diverse objectives around taste and enjoyment,
health and connection
➢ Shoppers trust in their food store to support their
wellness more than ever, even as they rely on a
➢ Food retailers are wider variety of stores in order to shop well
increasingly well-
positioned for shopper • Grocery stores increasingly need to fulfill a diversity of food
experiences, with strategic opportunities to align in-store
wellness and digital touchpoints to enhance choice, enjoyment and
personal connection
#GroceryTrends 5
#GroceryTrends State of the Marketplace
6
Grocery shopping remains a national pastime
Currently in the U.S.
“He does more of the
shopping now. It used to
be that he did most of
the cooking when I did
the shopping, but now
our roles have kind of
flipped now that we’re
eating healthier.”
85 % of all adults say they have
at least 50% of the responsibility
for household grocery shopping
—Tanya, 45
89% 80% (compared to 84% in 2017)
#GroceryTrends 7
Co-shopping is still the prevailing strategy
WORLD OF SHOPPERS
Single-person Households Multi-person Households
CO-SHOPPERS
varying degrees of sharing the labor
27% 44% 7% 23%
SELF SHOPPER PRIMARY SHOPPER SECONDARY SHOPPER SHARED SHOPPER
ALL shopping Majority of shopping Minority of shopping Equal shopping
44% 56% 35% 65% 70% 30% 59% 41%
vs. 2017 vs. 2017 vs. 2017 vs. 2017
45% 55% 39% 61% 66% 34% 48% 52%
#GroceryTrends 8
One-third of shoppers now shop online
Today:
34% of shoppers are shopping online
28% are shopping online-only retailers,
up from 16% in 2015
#GroceryTrends 9
Weekly trips remain stable, even among online shoppers
Online
1.6 Shoppers
2.2
2.1 2.1
2.2 1.6
2.0 trips per
1.9 1.9 week
Non-Online
1.7 1.7 1.6 1.5
TRIPS
1.6 1.5 Shoppers
1.5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
#GroceryTrends 10Online shopper’s weekly spend higher than typical shopper
$127
per week
by online
$110 shoppers
$105 $106 $107
$100 $103 $101
$98 $98 $97
$93
$104
$109
SPEND
$97 $98 $98 $100
$93 $94 $95
$86 $87 $90 spent on
groceries per
week
Weekly spending on "grocery-type" items (FMI estimate of prior calendar year)
Weekly spending on key grocery categories (U.S. Bureau of Labor Statistics estimate) of
calendar year shown
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
#GroceryTrends 11Insert picture
#GroceryTrends Meet the Online Shopper
12Online shoppers shop multiple channels/banners
CHANNELS USED ‘ALMOST EVERY TIME’ WHEN SHOPPING FOR
Shoppers FOOD AND GROCERIES
visit an average of
Online Non-Online
4.1 Shoppers Shoppers
retail banners for
groceries each Supermarket 55% 59%
month Supercenter 29% 23%
Mass 22% 12%
ONLINE
Club 14% 6%
Shoppers visit an Limited Assortment 15% 7%
average of
Natural/Organic 11% 2%
5.3 Drug 10% 2%
retail banners for Ethnic 12% 1%
groceries each
month Number of Channels 3.8 2.8
#GroceryTrends 13The gender divide in online shopping, almost equal
All Shopers 45% 55%
Online Shoppers 51% 49%
Non-Online Shoppers 42% 58%
Males Females
#GroceryTrends 14The generational divide in online shopping, or not
WORLD OF SHOPPERS
All Shoppers 32% 29% 32% 7%
Online Shoppers 47% 31% 19% 4%
Non-Online Shoppers 24% 27% 39% 9%
Millennials GenX Baby Boomers Silent
#GroceryTrends 15What is the demographic profile of online shoppers?
Non-
40% Online
23%
54%
36% Online
Shoppers
$74,000
52%
68%
$87,000
#GroceryTrends 16Online shoppers are planners
Pre-shopping Activities
Check pantry/fridge 84%
78%
Check recipes 42%
55%
Non-Online
Plans out meals 34%
44% Online Shoppers
List Making
Make shopping list 75%
81%
Different lists for different stores 29%
39%
#GroceryTrends 17Online shoppers utilize digital and traditional list tools
List Development Tools
87%
Paper list
77%
6%
Paper list on flyer/handout from store
15%
Digital tool/service for lists in general (such as Cozi, 4%
Google Keep, Remember-The-Milk, Wunderlist, AnyList) 17%
3%
List feature on store's website or app
15%
Digital tool/service for grocery lists (such as Out-Of- 2% Non-Online
Milk, Grocery IQ, Yummly or BigOven) 10% Online Shoppers
#GroceryTrends 18Shoppers are savvy digital shoppers
Digital Shopping Activities
23%
Check stores’ online offerings 46%
27%
Use grocery store app 46%
27%
Search online for discounts 43%
8%
Go online for product info 36%
14%
Use other grocery-related app 35%
Non-Online
5%
Search online for reviews 30% Online Shoppers
#GroceryTrends 19Insert picture
The Online Shopping Experience
20Online shopping happens less frequently than in-store shopping
Frequency of online ordering
15% 15% 24% 46%
Once+/Week Every two weeks Once a month Less often
Online Shoppers
order an average of
once per
month
#GroceryTrends 21Online shoppers take advantage of online service features
Online Shopping Activities
List-building tools based on previous purchases 58%
Return of unwanted items 57%
Subscribe-and-save for frequently purchased
52%
items
Integration with other online services (recipes,
38%
meal-planning, nutrition, financial, etc.)
#GroceryTrends 22Center store continues to dominate online,
though fresh categories are gaining
Past-year online purchases most
Categories ordered online least
often include non-perishables
often include many perishables
Health & beauty 38% 20% Milk, non-dairy substitutes
Salty snacks 35% 19% Fresh meats and seafood
Coffee & tea 34% Meat / 18% Non-prescription drugs
Dairy Deli Bakery
HH cleaning items 34% Seafood
17% Packaged meats
Paper products 30% 14% Deli foods
Packaged/canned foods 30% 11% Fresh bakery items
Center Aisles Produce
10% Fresh prepared
Frozen
Checkout
7% Meal kits
3% Baby foods*
#GroceryTrends 23While online is emerging as a player in center store,
in-store retains trust in the important fresh categories
Prefer to buy online Prefer to buy in-store
Routinized Tasks, Routinized 2% Fresh produce 92%
Purchases 3% Deli foods 91%
3% Refrigerated dairy foods 91%
Online is helping to absorb the 4% Fresh meats & seafood 91% FRESH
3% Fresh bakery items 91% PERIMETER
drudgery of shopping—not only Milk or substitutes 90%
3%
the task itself, but by managing 3% Packaged meats 89%
routine, bulk-oriented or less 5% Fresh prepared 87%
inspiring staples. 3% Frozen foods 87%
3% Packaged breads 86%
4% Sweets 76%
5% Baking/cooking items 75%
4% Ready to drink beverages 75%
5% Packaged/canned foods 73%
4% Salty snacks 73%
5% Condiments 73%
6% Meal kits 69%
6% Non-prescription drugs 68%
9% Coffee & tea 67%
9% Bulk foods 65%
15% Baby food 64%
9% Household cleaning products 63%
8% Paper products 63%
11% Health & beauty products 62%
17% Pet food or treats 58%
#GroceryTrends 24Range of options for online order delivery
ONLINE FOOD SOURCES USED,
BY GENERATION
38%
29% 28%
26%
19% 18% 18%
14% 13% 12% 11%
9% 8%
5% 6% 5%
3% 3% 3% 3%
1% 0% 1% 1% 0%
Online grocery ordering Online for same/next-day Meal kit subscriptions CSA subscriptions Food service (takeout,
(net) delivery (net) pickup, delivery)
ONLINE FULFILLMENT MODELS USED,
BY GENERATION
13% 15% 14% 11% 16% 13%
9% 10% 10% 9% 10%
5% 4% 6% 5% 6% 5%
2% 3% 0% 0% 1% 0% 2% 3%
Standard shipping to my Pickup at my local store Pickup at a drop-off Same-day home delivery Next-day home delivery
home via UPS, postal location other than the
service, etc. store
Total Millennials Gen-X Boomers Matures
18-37 38-53 54-72 73+
#GroceryTrends 25Use of online grocery is spreading across generations
ONLINE FULFILLMENT SERVICES USED, BY GENERATION, HISTORICAL TREND
Same/next-day Standard shipping Pickup at my Pickup at other
home delivery to home local store location
19%
16%
15% 15% 15%
14% 14%
11%
10% 10% 10%
9%
8%
6%
5% 4% 5%
3%
2% 2% 1% 3%
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2017
2018
2018
0% 0%
Millennials Boomers Millennials Boomers Millennials Boomers Millennials Boomers
Gen X
Same/next-day home delivery Gen X
Standard shipping to home Gen X
Pickup at my local store Gen X
Pickup at other location
#GroceryTrends 26Insert picture
#GroceryTrends Online In-Store
27Technology is widely used in-store by all shoppers
Millennials
Total Gen X Boomers
with kidsOnline shoppers use technology in-store in many ways
In-store Technology Activities
Use a smartphone in store 83%
90%
Use digital coupons 47%
63%
Check weekly specials at primary store 43%
59%
Look up recipes 33%
59%
Read reviews of products/brands 18%
49%
Use in-store item locator 16%
39%
Scan QR code or barcode to compare 11%
pricing across store 40%
Non-Online
Scan QR code or barcode of item to learn 9% Online Shoppers
more about nutritional content 38%
#GroceryTrends 29Retailers should consider multiple touchpoints
to engage shoppers
Used a rewards card or account 51%
50%
Used a mobile app* 46%
29%
Grocery store app 27%
20%
Interacted through the store's website 19%
13%
Grocery Store
17%
Signed up for newsletters via email or home address
10% app downloads
Signed up to receive customized email or newsletters
11%
19% up
14%
from 15% in 2017
Submitted contest entry with phone number or address
7% to 22%
Followed/liked my store through online social network 16%
4%
Provided my phone number for text messages 12%
4%
Online Shopers
Maintained health profile with store 9%
dietitian/nutritionist 0% Non-Online
None of the above 18% Shoppers
34%
#GroceryTrends 30Insert picture
Online vs. In-store
31Online shopping has emerged as a solve for the pragmatic
elements of shopping well while supporting personalization
“The main online advantage is the extremely fast checkout. It might take me 30 minutes to gather everything I need,
whereas online I get the same stuff in a few minutes. Saving time. That’s the main thing.” – David, 45
ADVANTAGES OF ONLINE GROCERY SHOPPING
Saves time 53%
Online lubricates friction points of
More convenient 50% task and budgetary management
Allows me to get items I can't find in store 31%
Time, convenience, accessibility are
biggest benefits.
Saves money 20% It also delivers a degree of
Provides a wider selection of products 19%
personalization, using technology to
anticipate needs and preferences for
Can keep stored shopping list and reorder from it 17% more seamless use.
More pleasant than going to the store 16% Online broadens and deepens
Knows my preferences/shopping history 15% choices
Taps notions of personalization by
More sustainable than single trips to the store 11% Pragmatism
providing greater access to categories
Exploration
Provides better-quality products 8% and brands that align with household
Ethics interests and preferences.
Provides fresher produce 7%
#GroceryTrends 32Loss of control, cost and quality are disadvantages
of online shopping
DISADVANTAGES OF ONLINE GROCERY SHOPPING
I can't pick my own products 33%
“When in the store, I can look around I can't return items easily 28%
to see what they have if they are out
food or something. Maybe I’ll do X or Is more expensive 27%
Y. And I can see if the ingredient list
has changed by the manufacturer. I Products are sometimes delivered
spoiled or broken 23%
can’t do that if someone else is picking
my food for me. I can make the best Products aren't as fresh 22%
choices for me.”
– Dena, 47 Is harder to notice and explore new
22%
products
Takes away opportunity to get out
of the house 18%
“If I were to shop online, I’d
have to have more money. I
couldn’t be as financially tied
Takes more time 13%
to what’s on sale.”
– Stephanie, 33
Is less fun than going to the store 10%
Is more complicated 9%
Is less convenient 7%
None 11%
#GroceryTrends 33Despite in-roads by online, in-store remains differentiated
for its expertise in fresh categories and service
B&M does Online does a
a better job better or equal job
Freshness of perishable items 60% 22%
Good value for money 44% 36%
Affordable everyday prices 46% 35%
Broad selection of products 41% 42%
Convenient to use 38% 45%
Ability to save through sales, discounts and coupons 45% 35%
Openness and honesty 31% 38%
Helpful customer service 45% 33%
Easy returns process 49% 26%
Quick access to customer service 48% 32%
Sustainable and ethical practices 27% 36%
Availability of loyalty/rewards programs 42% 32%
Access to detailed product information 26% 49%
Selection of natural product offerings 32% 39%
Selection of organic product offerings 32% 38%
Opportunities to explore & learn about food/cooking 25% 39%
#GroceryTrends 34Online shoppers hold online and in-store to similar standards
IMPORTANT QUALITIES OF A REGULAR FULL-SERVICE
SUPERMARKET VS. ONLINE FOOD RETAILER
(Among Online Shoppers)
Freshness of perishable items 75%
68%
Affordable everyday prices 71%
67%
Convenient to use 59%
63%
Broad selection of products 64%
59%
Openness and honesty 59%
58%
Helpful customer service 49%
53%
Ability to save through sales/discounts/coupons 58%
52%
Quick access to customer service 45%
51%
Easy returns process 44%
50%
Access to detailed product information 37%
48%
Sustainable and ethical practices 41%
38% Regular full-service
supermarket
Availability of loyalty/rewards programs 39%
34%
Online food retailer
Selection of natural product offerings 36%
33%
Selection of organic product offerings 34%
31%
Opportunities to explore & learn 21%
26%
#GroceryTrends 35Insert picture
The Future of Food Retail
36As the landscape changes, B&M will remain in
shoppers desire to eat well and shop well
TO HELP ME EAT WELL, 2-3 YEARS FROM NOW, I WILL…
Shop in store more No change Shop online more
Total 19% 65% 16%
Millennial 18-38 18% 55% 27%
Gen X 39-52 17% 64% 19%
Boomer 53-71 20% 73% 8%
Millennial with kids 18% 48% 34%
Millennial without kids 18% 59% 23%
How grocery stores will be used is likely to shift
“I’ll do some in-person shopping just to pick my own produce and the social
element. But I can imagine Online increasing ... When we’re fully into our
retirement … We will have all this time but we may want to use that time for
something else.”
– Randy, 55 & Linda, 55
#GroceryTrends 37The future value of food retail will require it to navigate quality,
facilitate choice and create personal connection
“In the future we may do the physical
Adapting, Integrating Channel Strategy
store only when we want to explore
Rather than a separate, competitive specialty items or certain fresh
channel, Online may well be integrated as a things. Especially if they have very
central part of retailers’ strategy, speaking personable employees and the
to shopping and eating occasions especially samples are impeccable.”
suited to that touch point.
– Eric, 31 & Therese, 30
What would be a problem if regular stores disappeared and I had to get all my groceries online …
No, this isn't a
8% 13% priority for me
33% 26% 38% 37% 48%
25% 39% No, online-only
36% resources will
67% 23% 26% 35% solve this
48% 28%
44% Yes, this will be a
38% 36%
28% problem
24%
The perishable I won't be able to I will feel It will be harder to I won't have access It will be harder to With quick
items won't be as choose my own disconnected from know where to a live person to get products in an delivery, I won't be
fresh or high- foods and the products I products come help me find and ethical and/or as motivated to
quality beverages consume from choose products sustainable way make
weekly/monthly
meal plans
#GroceryTrends 38Digital communication is increasingly influencing
both eating and shopping well
Already entrenched in pre-shopping, digital
tools are increasingly influencing in-store rituals
⚫ Digital list making
⚫ Websites and apps for passive and
active discovery, information
⚫ Smartphone use in-aisle
⚫ Amazon Prime household penetration
and use in non-food grocery
“Prior to the smartphone, I
needed a computer. But in
the store I may pivot my plan.
I’ll google something to find
a quick recipe or text [my
wife] to confirm things.”
– Eric, 31
#GroceryTrends 39Procuring groceries online is the inevitable progression
of digital’s influence on eating and shopping well
Third-Party Delivery
Replace visits Click & Collect
Consumers are experimenting with Pure Play
various modes and resources to
determine if/how online delivers
Direct to Consumer
against shopping-well aims
Augment visits Meal Kits
Snack Kits
“[I tried a third-party grocery
delivery] service and it was great.
Whether it’s grocery delivery or
shipped to your doorstep the key
is the quality of the person
picking the items.”
– Dena, 47
#GroceryTrends 40KEY TAKEAWAYS ABOUT HOW TECHNOLOGY IS CHANGING GROCERY SHOPPING Shoppers now experience food digitally: Younger consumers already accept digital tools in their food shopping routines, have begun to leverage digital innovations to expand their eating routines, and expect digital platforms and tools to evolve to help them to both eat and shop well; a meaningful number of older shoppers are now starting to experience food through technology as well Supermarkets are central: Although online retailers are developing new solutions and experiences, B&M supermarkets will continue to have an important role, particularly for fresh categories and personal experiences #GroceryTrends 41
Q&A #GroceryTrends 42
From FMI …
June 26 July 31 Today
1. Inside the Grocery 2. The Shopper Desire 3. How Technology is
Shopper’s Head: to Eat Well and the Changing Grocery
Where They’ve Been, Implications for Shopping, From the
Where They’re Going. Shopping. Consumer Perspective.
#GroceryTrends 43Learn more about Grocery
Shopping Trends and
download the full report at:
www.fmi.org/grocerytrends
#GroceryTrends 44You can also read
