Table of Contents
It’s sometimes said by people involved in community pharmacy that health care will change more during the next decade than it has in the past 50 years. The same applies to food retailing. Evidence supporting that position isn’t hard to come by.
It’s sometimes said by people involved in community pharmacy that health care will change more during the next decade than it has in the past 50 years. The same applies to food retailing. Evidence supporting that position isn’t hard to come by.
A new report from A.T. Kearney sheds light on the burgeoning role e-commerce is playing in the U.S. grocery business. After years of lagging behind their counterparts in Europe, more American consumers are grasping the advantages of online transactions and making them a part of their shopping routine. The study, "Capturing the Online Grocery Opportunity," found that more than one-third of primary grocery shoppers purchased food and beverages through e-commerce channels during the past 12 months, a total driven by, depending on the age group, increases of between 18% and 29%.
The people gravitating to online grocery purchases — urbanites, Millennials and individuals with an annual income of at least $75,000 — are especially desirable customers, according to the authors of the report. They are in the vanguard of the trend that is expected to produce a compound annual growth rate of 15% to 18% over the next 10 years, pushing e-commerce’s share of total consumables sales to between 12% and 16%.
In addition to that shift, technology is influencing the way consumers behave when they shop a brick-and-mortar outlet. Research recently conducted by Nielsen shows that for non-replenishment purchases — which account for approximately half of branded product sales — consumers utilize online resources 7% of the time before heading to the store. Digital tools are even more significant for people who seek out coupons before shopping. For purchases of branded products, consumers obtain 30% of coupons from websites and another 11% from mobile apps and email. And, as Kroger’s current experiment with smart shelving demonstrates, technology’s impact on shoppers is also being felt in stores.
Those changes, coupled with the evolution of consumer preferences driven by concerns about good nutrition, the arrival of new competitors and the need to elevate the in-store experience, make these interesting times for food retailers. Companies that want to succeed will have to master all of those disciplines, and combine the best of traditional and cutting-edge retailing.