Between Amazon’s acquisition of Whole Foods, Walmart’s unlimited grocery delivery subscription service and Target’s Shipt partnership, it’s clear retail giants are on a quest to capture the projected $29.7 billion online grocery market. However, despite these investments, our 2019 Future of Retail report found consumers overall just aren’t ready to purchase their groceries online. In fact, the majority of consumers (82%) bought groceries in a physical grocery store in the last year, while only 11% did so on Amazon.com.
Our research shows that consumers still prefer to go in store for groceries, and technology is low on their wish list from the brands they shop with. Instead, sustainability and brand reputation are playing a large role in driving consumers to choose one brand over another.
Curious to learn more? Here’s what our research reveals about the state of grocery and the implications for retailers:
- The in-store experience is grocery’s golden ticket. Consumers still prefer to go in store because they like seeing and touching fresh produce before buying (64%), enjoy the routine of grocery shopping (50%) and simply because it’s a reason to get out of the house (36%). Just 4% of consumers feel grocery shopping is inconvenient.
- Sustainability and brand reputation are top drivers for grocery purchases, not tech. Despite the recent influx of tech into the grocery experience, just 15% of consumers report they’re excited about the tech revolution in the industry. Instead, consumers say they care more about brand reputation (35%) and sustainable options (31%). This is not to say that tech can’t play a helpful role in the in-store experience, but rather highlights that retailers must ensure they’re integrating it where it adds clear value to the consumer.
For grocery retailers looking to attract and retain customers in this evolving industry, the report highlights a major opportunity for grocers to double down on the in-store experience and expand offerings outside of just shopping. For example, Whole Foods has wine and cheese flight nights, Kroger offers in-store sommeliers and Mariano’s has “Rockin’ Happy Hour” featuring jazz piano performances. By turning grocery shopping into a memorable experience, grocers can drive a deeper brand connection that keeps consumers coming back. Grocery retailers can also appeal to increased customer concern for sustainability by reevaluating packaging, stocking more local produce and selling reusable shopping bags.
To learn more about how consumer preferences are driving the grocery industry forward, download the full Walker Sands 2019 Future of Retail report here. You can also follow along with our 3-part blog series on the report (read part one here).