Online Buys Increase, but Food Lags

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Online Buys Increase, but Food Lags

08/29/2016

By Pan Demetrakakes

Online purchases for pickup are gaining traction among American shoppers, but this preference is sharply differentiated by gender, generation and product category.

That’s one of the major takeaways from the third annual U.S. Consumer Research Report from King Retail Solutions. The report is based on a survey done last winter with about 1,200 consumers, roughly divided among millennials, Gen Xers and Baby Boomers.

Developments in omnichannel marketing were a focus of the report. The survey found that click-and-collect service appeals to 83 percent of respondents overall, compared with 78 percent last year. The appeal is about even between men and women, but more men (58 percent) than women (50 percent) report actually having used a click-and-collect service in the previous 12 months. It seems to appeal more to younger consumers, with 63 percent of millennials having used it, followed by Gen Xers (57 percent) and Baby Boomers (41 percent).

“This decrease in Baby Boomer adoption and interest may imply that buying online for in-store pickup, once tried, simply does not satisfy the Baby Boomer generation as it seems to do their younger shopping counterparts,” the report states.

In addition, food comes in last in preferences for click-and-collect. Among all respondents, the two lowest-scoring categories in terms of likelihood of buying online are groceries (34 percent) and fresh prepared meals (28 percent). The top categories were all durable goods: electronics (78 percent), apparel and housewares (both 60 percent).

One decidedly low-tech preference uncovered by the report had to do with in-store communication. The two most popular ways to get information inside a store were in-store signage (39 percent) and through sales associates (30 percent). Only 18 percent preferred to use apps, and only 13 percent relied on in-store kiosks.

Store signage “is the most common, prevalent form used by retailers to spread information,” says Christopher Studach, KRS creative director. “Customers expect to see them and retailers expect to provide them (even if it’s minimal). It is also the easiest to use, and possibly the most reliable. In other words, well-maintained signage never fails.”

When it comes to more technologically sophisticated in-store contacts, a decided gender gap emerges. Asked how they felt about retailers being able to track their in-store movements through their phones, men were more likely to be “all for it,” while women were more likely to say they don’t like it or express reservations. This mostly held true across all for generational groups, with the gap especially pronounced among millennial women: only 24 percent said they were “all for” such contacts, compared with 50 percent of millennial men.

Studach cautioned that the study was purely quantitative and did not probe reasoning, but speculated, “Tracking has the potential to feel like a violation of privacy and I think in broad terms, women are more likely to perceive it as invasive and therefore less receptive to such things.”

 The report extensively covered cross-channel purchasing—buying things in stores that are not normally known for selling them. Food is the biggest such category. Almost two-thirds (65 percent) of respondents said they had bought food from a non-grocer in the past 12 months, and 64 percent said they bought means from a non-restaurant. (It’s worth noting, however, that KRS classifies Walmart and Target as non-grocers, despite their extensive grocery offerings.)

After Walmart and Target, the biggest non-grocer destinations for grocery purchases are Kmart, Costco, Dollar General, Sam’s Club, Dollar Tree and CVS Health. Canned and boxed goods were the biggest food category for cross-channel purchases at 65 percent of respondents, followed by bread/bakery items (59 percent), dairy (50 percent), fresh produce (49 percent), frozen foods (49 percent) and meat (39 percent).

Although meat is the lowest category for cross-channel shopping, it showed the biggest gain, picking up 17 percentage points from the first KRS survey in 2014. Studach suggests that this is because meat was starting from a low base, since it’s something that many consumers want to see before they buy. But he speculates that this may be gradually changing as online shopping takes hold in general.

“As online and other alternatives to traditional shopping become commonplace, and more foods of all kinds are being sold by traditionally ‘non-foods’ retailers, the general public is becoming accustomed to a broader marketplace,” Studach says. “As confidence in quality, service and overall experience with non-traditional retail options grows, it translates into confidence in the products found at those locations.”

To access the KRS U.S. Consumer Research Report, click here.