IRI report examines online CPG shopping behaviors.
Consumer confidence is holding steady with 53% of U.S. households feeling they are in good financial health in Q4 2017 compared with the same figure in Q4 2016, according to IRI Consumer Connect survey results.
Despite this stable outlook, consumers are still mindful about their spending and are turning to the Internet for money-saving opportunities. In fact, 28% of consumers say they buy grocery items online compared with 23% in Q1 2016, so the IRI survey also took a closer look at the latest trends in buying grocery, home care and personal care items online.
Results from the IRI survey also examined consumer confidence according to age and found that 47% of Millennials, 45% of Generation X, 51% of baby boomers and 68% of seniors are feeling good about their financial health. Nonetheless, 31% of consumers in Q4 2017 said they are struggling to buy needed groceries compared with 30% in Q4 2016.
“While consumer confidence has improved during the last few years, consumers can still be a bit shaky about their job and financial prospects, so we’re seeing some mixed signals in our survey results,” said Susan Viamari, vice president of Thought Leadership for IRI. “Many, especially younger consumers, say they think the Internet provides money-saving opportunities, so we wanted to dig further and find out what role online shopping is playing in consumers’ CPG spending. Consumers are certainly not going to do all of their CPG shopping online, but marketers must keep in mind that 76% of all shopping trips begin online and 50% of CPG category growth is predicted to be online in 2018.”
Online Shopping Trends
It is no surprise that consumers look for the best possible deals online, but how does this stack up by CPG category? The following showcases how consumers shop online to find lower-priced options (sentiment for total, Millennials, Generation X, baby boomers and seniors, respectively, listed below):
Home care options: 30%, 44%, 39%, 27%, 18%
Beauty/personal care options: 32%, 46%, 42%, 28%, 18%
Over-the-counter medication options: 21%, 28%, 25%, 20%, 16%
Food and beverage options: 20%, 30%, 26%, 18%, 11%
The IRI survey also revealed that consumers think shopping online provides the added benefit of reducing their impulse purchases. Overall, 51% of total shoppers, 54% of Millennials, 55% of Generation X, 52% of baby boomers and 46% of seniors say they make fewer unplanned purchases online.
Of course, convenience plays a big role in online shopping, with 20% of consumers saying it is easier to find needed grocery items online. By age, 32% of Millennials, 28% of Generation X, 16% of baby boomers and 12% of seniors say they find items more easily.
Ordering online with in-store pickup (click-and-collect) provides convenience without the added shipping fee. While 40% of total shoppers like this convenience, 55% of Millennials, 52% of Generation X, 36% of baby boomers and 25% of seniors specifically like click-and-collect options.
In the upcoming year, the Internet will play an integral and growing role in the CPG purchase process:
55% of consumers will download coupons from retailer/manufacturer websites
51% of consumers will compare prices on retailer websites to find the lowest prices on needed items
24% of consumers will order online for home delivery
22% will order online and pick up in store
12% will use online subscription services for some grocery purchases
6% will use online meal kit delivery services
As e-commerce gains steam, consumers are looking for a variety of offerings that will enhance and/or simplify their shopping experience. Delivery — free and/or fast — is quite popular, but desires go beyond that, particularly among younger consumers (sentiment for total, Millennials, Generation X, boomers and seniors, respectively, listed below):
Online purchasing with free delivery: 50%, 58%, 57%, 49%, 39%
Online purchasing with fast delivery: 36%, 45%, 43%, 34%, 25%
Online purchasing with in-store pickup: 33%, 44%, 43%, 30%, 22%
Online purchase of freshly prepared items: 28%, 42%, 34%, 24%, 17%
Subscription services for frequently purchased items: 22%, 31%, 30%, 20%, 11%
“When consumers think about online CPG shopping, they have specific ideas about what is helpful in their lives,” added Viamari. “There really is no one-size-fits-all answer, so it’s critical to understand what it is that makes your key shoppers tick.”