Our data suggests that 42% of consumers globally plan to spend less than a year ago in this season’s sales events, while 13% will spend more. Of those who will participate, 72% are holding off purchases until the event and most will participate mainly via online channels. So, a relevant online proposition is not only critical to long-term growth, it’s the key priority right now too.
What’s the key challenge for grocery?
Online grocery penetration continues to be lower in most markets. But during the pandemic, 55% of consumers have bought their groceries online at least once. Of those, 42% say they are now ordering groceries online more frequently because of COVID-19. That said, 53% of consumers tell us they don’t shop for groceries online because they like to have full control over their purchases. And 53% of those who do are now splitting their purchases across multiple retailers — some online and some face to face.
One challenge that brands must consider is how they will get consumers to discover new products. Globally, 49% of online grocery shoppers use the repeat purchase option, signaling how important it is to get into their basket or list of favorites. Moreover, 54% say that when shopping online for groceries they try fewer new products than they would in store.
Three questions to shape your next actions
With such a vast and rapid shift in value to e-commerce, business leaders must ensure their organizations are continually challenging all their assumptions about what the digital consumer wants, how they want to purchase it, and what it takes to meet those needs. While the unprecedented times we are living through are deeply challenging, they are also full of new opportunities to serve the consumer. Here are three questions to consider:
1. How deeply do you understand your target consumers and the outcomes they are trying to achieve?
Do they want to buy a beauty product, or do they want to look younger? Do they want new sneakers to run faster or to look better? Many consumers are increasingly willing to share their data, but companies must invest in the capabilities needed to listen and respond. Be nimble; quickly pivot to match shifts in customer demand. Product assortments that generate high online sales change quickly. Create experiences your consumer will love by truly understanding their needs, co-create with them, prototype, launch, and learn. Be willing and ready to iterate.
2. What are the critical moments of truth along their end-to-end shopper journey?
When do shoppers want to see/feel the product? When do they want validation that it lives up to its promise? In today’s contactless world, prioritize those moments that make a big difference to shoppers and can make a big difference to the company. Then apply a continuous process of design and innovation to reimagine those moments.
3. Are you developing a distinct online strategy, or re-creating the physical proposition?
Brands often try to transfer their in-store value proposition into a digital context, to meet the consumer’s desire to engage with the product on a sensory level (e.g., feel it, smell it). But immersive brand experiences are channel specific. Many of the "old physical" experiences that brands had in stores cannot be transferred to a phone-sized screen. Find new parameters to strengthen a brand — such as repositioning it around responsible production — which can be evidenced online.
Now that we’ve moved beyond the volatility of early COVID-19 to enter Deep COVID, we can form a clearer picture of the differences that are emerging across markets, categories and consumer segments. This is critical to understanding how the recent and sudden growth of e-commerce will evolve beyond the pandemic.
As leaders respond to and shape the changing consumer, they must ensure their organizations can quickly access the full set of capabilities they need. It’s important to think creatively about how to redeploy existing skills and assets and leverage the capabilities that others have built.
COVID-19 is transforming consumer behavior. Organizations that want to stay relevant — through the crisis and into the future — must be equally bold about the depth and pace of their own transformation.