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I N-S T O R E
FOR ONLINE
GROCERY
SHOPPING
OMNICHANNEL STRATEGIES TO REACH
CROSSOVER SHOPPERS
JANUARY 2017
THE BLURRING
LINES BETWEEN
ON AND OFFLINE
SHOPPING
Online and offline switching behaviors suggest that the majority of consumers who have
purchased certain durable and service-related products online continue to shop online more
frequently than in store for these categories. The opposite is true for fresh and packaged groceries
and medicine or health-care products.
For online purchasing of consumables, the most effective activation strategy among trialists
(purchased online in the past but not recently) and considerers (currently dont buy online but
would consider buying) is a money-back guarantee for products not matching what was ordered.
For fresh foods, strategies that address quality concerns top the list.
For consumable categories, the most impactful way to reach consumers with messaging
that influences purchase behavior is with traditional touchpoints, such as visits to a physical
store. For consumer electronics and fashion purchasing decisions, the most commonly cited
information sources are digital touchpoints, such as store or brand websites.
Only a small percentage of consumers around the world say theyre using in-store and online
digital technologies to aid in their shopping, but usage is growing.
1
Mobile-phone subscriber data from International Telecommunication Union (2016). Facebook user data from Facebook (September 2016).
2
National Bureau of Statistics of China; Statistics Korea.
3
U.K. Office for National Statistics; Census Bureau, U.S. Department of Commerce.
Nielsen Global E-Commerce spans over 20 countries around the world. Measurement may rely
on direct from retailer data (ePOS), data collected via Nielsens Consumer Panels, other licensed
data, or a combination of the foregoing. Retail sales data for China and France is for the two
years beginning September 2014 and ending in August 2016.
Survey findings are based on more than 30,000 respondents with online access in 63 countries.
While an online survey methodology allows for tremendous scale and global reach, it provides
a perspective on the habits of only existing internet users, not total populations. In developing
markets where online penetration is still growing, respondents may be younger and more affluent
than the general population of that country. In addition, survey responses are based on claimed
behavior, rather than actual metered data. Cultural differences in reporting sentiment are likely
factors in the outlook across countries. The reported results do not attempt to control or correct
for these differences; therefore, caution should be exercised when comparing across countries
and regions, particularly across regional boundaries.
4 IN 10
6 2017 CONNECTED COMMERCE REPORT
BUYING CONSUMABLES ONLINE HAS ROOM TO GROW
GLOBAL PERCENTAGE WHO SAY THEYVE EVER PURCHASED THE CATEGORY ONLINE
DURABLES CONSUMABLES
PRODUCTS FOR
CZECH REPUBLIC 62% CHINA 40%
BABY AND YOUNG 18% UKRAINE 50% SOUTH KOREA 39%
CHILDREN
SLOVAKIA 50% INDIA 35%
WINE AND ALCOHOLIC BRAZIL 50% UNITED KINGDOM 25%
BEVERAGES
14% SOUTH KOREA 49% ISRAEL 21%
GREECE 49%
PET FOOD AND
SUPPLIES 13% L ATVIA 49%
2014 2016
ALREADY USING
25%
DELIVERY TO HOME
28%
12%
PICK UP INSIDE THE STORE 15%
12%
USE DRIVE-THROUGH PICKUP 11%
10%
PICK UP CURBSIDE OUTSIDE THE STORE
11%
57%
PICK UP INSIDE THE STORE
57%
55%
USE DRIVE-THROUGH PICKUP 60%
52%
PICK UP CURBSIDE OUTSIDE THE STORE
55%
31%
PICK UP INSIDE THE STORE 27%
33%
USE DRIVE-THROUGH PICKUP 29%
37%
PICK UP CURBSIDE OUTSIDE THE STORE 35%
Source: Nielsen Global E-Commerce Measurement Sales data, September 2015 to August 2016
Online sales of all CPG categories measured by Nielsen totaled $23.2 billion
between September 2015 and August 2016, up 25.4% over the previous 12
months. Of the top 15 CPG categories purchased online, the majority were
nonedible, covering the personal-care, home-care and baby-care categories.
In terms of value sales, skin moisturizer was the largest online CPG category,
with sales of $3.4 billion, up 24% over the previous 12 months. Facial masks
were the third-largest online CPG category in China, with sales of $2.0 billion,
up 1% year-over-year.
The online baby-care market in China also is quite sizable. Online sales of
infant milk formulas totaled $2.8 billion for the 12 months ended August
2016, while online diaper sales totaled $1.8 billion, up 22.8% over the
previous year.
Beyond infant fomula, edible categories havent achieved the same online
success as their nonedible counterparts, but theyre growing rapidly. Pet
food is the second largest edible category, with $697.0 million in online sales
between September 2015 and August 2016, up 45.5% over the previous 12
months. Liquid milk and biscuits also are showing strong online growth, with
sales up 80.2% and 50% year over year, respectively.
As was the case in France, the majority of the top online CPG categories are
experiencing stronger growth online than in stores. Online sales of infant
diapers grew 22.8% year-over-year, compared to 9% in stores. Similarly,
online sales growth greatly exceeded that in brick and mortar for liquid milk
(80.2% versus -4%, respectively), biscuits (50% versus -1%, respectively) and
skin moisturizer (24% versus 2%, respectively). There are, however, notable
exceptions to this trend. In fact, brick and mortar growth exceeded online
sales growth for infant milk formula (7% versus -9%, respectively) and facial
masks (16% versus 1%, respectively).
Source: Nielsen Global E-Commerce Measurement Sales data, September 2015 to August 2016
But the story isnt the same for all durables. For categories with
high price tags, infrequent purchasing cycle and an experiential
dimension (where interacting with the product is important), the
online channel isnt nearly as dominant. For example, among global
respondents who purchased consumer electronics online, only
37% say they buy the category more often online; 21% say they buy
more often in store, and 43% say they buy online and in store at the
same frequency. For fashion, 33% say they buy more often online,
and 26% buy more often in store. And for furniture and dcor, the
percentage saying they buy more often in store (30%) is greater than
the percentage saying they buy more often online (25%), though the
largest percentage say they buy in store and online equally (46%).
Considerers: I am
currently not buying Regulars: I am
online, but will consider it currently buying
in the near future online regularly
How can brands convince lapsed purchasers and those who have never
purchased online to buy online?
%
CONSIDERERS 58
%
[CURRENTLY NOT BUYING ONLINE, BUT WILL 56
CONSIDER BUYING IN THE NEAR FUTURE]
TRIALISTS
[HAVE BOUGHT ONLINE IN THE R RE
D 49%
FO RDE
46%
C K O
PAST, BUT NOT RECENTLY] BA AS
N EY AT W
MO WH
O UR ING
EY CH
N TE MAT UC
T
CTS
R A N OT R OD ODU
38%
A P R
GU TS AY R P ERED
WE DUC ED FO
S AM VICE S ORD 40%
PR
O E R RED
O VID NT SE AT WA O RDE A
P R E H EA N ECT
WE ACEM ING W CAS AN SEL
AC
L H I L I N C
REP MATC -MA O YOU
XT/E
T A TE L ABLE S UCT 50%
CU
NO U
YO AI OD
END NAV E PR
WE S UCT IS U STITUT 46%
RA
D UB
PRO RRED S ( AT 3 0
DOWS
CY
E F E IN
PR W
IV E R Y EDULE
E C IS E DEL Y O U R SCH
R
VE P T O F IT
FULFIL
WE HA VA L S )
U T E IN T E R 48%
M IN
E, D ETA IL ED
PR O V ID ES R EA L-TI M 4 %
3
O U R W EB SI
TE YO U R O R D ER
S O N TH E STAT U S O F
PR O G R ES
LMENT DE
WE HAVE A NUMBER
OF CONVENIENT CO
POINTS AT TRAIN STA LLECTION
TIONS, BUS TERMINALS
ETC. 36%
WE O
FFER 37%
THUR FREE
S D AY DELIV
, EVE ERY T
L
WE RY W UESD
IVE
OF EEK AY T O
PUR FER
CH FRE
ASE ED
R
TR SA ELI
YO VER
YF
FR B O VE 50%
EE NLIN A M Y FOR
IN D EL E PU
INIM 46%
E
TH UM
ES
E IVE R SPE
BU NE RIE C HA ND
EN Y X TT SS SE
AN H E A
D E J O Y A RE V N
LIV U NN E M EN D D R
N O A EC
ER U NT Y E
L
IE IMI L P
A HS S A W IVE 49%
S S TE AS EE
EV D F S K 47%
EN RE AN
DA E D
YS
A
W
EE 4
39 2%
K
%
36
35 %
%
Source: The Nielsen Global Connected Commerce Survey, Q3 2016
53% 47%
43% 36%
54% 45%
60% 53%
46% 38%
47% 47%
37% 35%
46% 39%
53% 50%
38% 36%
44% 43%
37% 34%
45% 43%
52% 53%
39% 37%
GLOBAL PERCENTAGE IN EACH GROUP WHO SAY THE STRATEGY WOULD DEFINITELY
ENCOURAGE THEM TO BUY FRESH PRODUCTS ONLINE
CONSIDERERS
%
[CURRENTLY NOT BUYING ONLINE, BUT WILL 54
CONSIDER BUYING IN THE NEAR FUTURE] %
50
TRIALISTS
[HAVE BOUGHT ONLINE IN THE
PAST, BUT NOT RECENTLY] S
SH ON
R F RE TATI
EC 52%
FO XP
U ND UR E
E F T YO
54%
LR
UL T MEE T
A F MEE A
T EE O NO N OT E E
AN D O NT FOR
AR THAT AT D UARA
G U E M S T H
LY G D U E
C
WE DUC CE
ITE ON PRO
O DU OT ME
PR R O W E N HE SA
SH
FRE ECTAT
P S
ION U GET
T 42%
O R T Y O S E
F
RE
X P
DB
U
RCH
A
ILED 42%
YO U R E F U N X T P U R Y DETA
L
FUL WITH
N E CA R TION
E O D UCE F O RMA
FRE PR IN
ESH AND
O U R FR IPTIONS
ALL
OF SCR
T DE
R O DUC S 39%
P RESHNES
M A S SESSES F S
OVERCOME OUR QUA
L IT Y TE A
S S R A TI N G 40%
W A R D FRESHNE
D A
QUALIT Y D A ILY A N
P R O D UCE
TO
CONCERNS
WHE N SEL ECT ING PRO DUC TS
ON OUR SITE ,
YOU CAN SEE CUS TOM ER
RAT ING S AND
WRI TTEN REV IEW S ON THE
IR EXP ERIE NCE 37%
WIT H PRO DUC T FRE SHN ESS
39%
OUR P
RODU
TELL Y CTS H
OU HO AVE F
W MAN RESHN
AFTER Y DAYS ESS L A
IT IS D IT WILL BELS T
ELIVER O
ED STAY F
OVERCOME YOU RESH
REQ CAN M
EXAMINATION UES A
TS T KE SP
46%
SE OS ECI
CONCERNS BU
E UIT A
YOU L PRO
45%
WH
B E
YIN AT R NEE DUCT
ST G VI OT DS
-S E A H
LL OU ER
IN
G I R B S H O
TE U
MS YER PPER 40%
B S S
AN P
NE ICK ARE 40%
R AN
D
24
%
26
%
Source: The Nielsen Global Connected Commerce Survey, Q3 2016
WE GUARANTEE A FULL REFUND FOR FOR FRESH PRODUCE ITEMS THAT DO NOT MEET
FRESH PRODUCE THAT DO NOT MEET YOUR YOUR EXPECTATIONS WE NOT ONLY GUARANTEE
EXPECTATIONS A FULL REFUND BUT YOU GET THE SAME
PRODUCE FOR FREE WITH NEXT PURCHASE
50% 50%
35% 37%
50% 47%
53% 52%
44% 42%
OUR PRODUCTS HAVE FRESHNESS L ABELS ALL OF OUR FRESH PRODUCE CARRY
TO TELL YOU HOW MANY DAYS IT WILL DETAILED PRODUCT DESCRIPTIONS AND
STAY FRESH AFTER IT IS DELIVERED INFORMATION
46% 43%
34% 31%
41% 40%
45% 45%
33% 32%
OUR QUALIT Y TEAM ASSESSES FRESHNESS DAILY YOU CAN MAKE SPECIAL PRODUCT
AND AWARD FRESHNESS RATINGS TO PRODUCE REQUESTS TO SUIT YOUR NEEDS
42% 39%
26% 26%
38% 38%
43% 40%
29% 35%
PERCENTAGE WHO SAY THE INFORMATION SOURCE HELPS WHEN MAKING A PURCHASE DECISION
Note: See last page of report for list of advanced and developing markets
Source: The Nielsen Global Connected Commerce Survey, Q3 2016
PERCENTAGE WHO SAY THE INFORMATION SOURCE HELPS WHEN MAKING A PURCHASE DECISION
FASHION
Note: See last page of report for list of advanced and developing markets
Source: The Nielsen Global Connected Commerce Survey, Q3 2016
While only a small percentage of consumers around the world USE SELF-SERVICE
say theyre using digital technologiesfor example, in-store CHECKOUTS
handheld scanners, self-service checkouts and mobile appsto
aid in their shopping, usage is growing. SLOVENIA 46%
IREL AND 45%
The availability of many in-store digital technologies is most PORTUGAL 41%
NEW ZEAL AND 40%
prevalent in the advanced markets, where modern trade is well
ESTONIA 39%
developed and internet and smartphone penetration rates are
high. Israel is a leader when it comes to mobile-based features. USE A HAND-HELD STORE
Nearly four in 10 Israeli respondents say theyre using online or SCANNER TO PURCHASE
mobile coupons (38%) and shopping lists (24%), both up from PRODUCTS AS YOU SHOP
2014 (up five percentage points and four pp, respectively). One-
SWEDEN 35%
fifth (20%) have downloaded a retailer or loyalty program app
SWITZERL AND 28%
to their device to receive information or offers while in store (no BELGIUM 28%
change from 2014). ESTONIA 28%
NETHERL ANDS 26%
Switzerland is another digital leader, with some of the highest
rates of self-reported digital coupon and retailer-specific app USE ONLINE OR MOBILE
use in the worldwide study. Twenty-eight percent of Swiss SHOPPING LISTS
respondents say theyre using digital coupons (up 12 pp), and
17% say theyve downloaded a retailer or loyalty program app INDIA 37%
(up eight pp). Swiss retailers also have incorporated several ISRAEL 24%
technologies to speed up the checkout process that have gained TURKEY 24%
traction with shoppers. Thirty-six percent of Swiss respondents THAIL AND 22%
say theyve used a self-service checkout (up five pp), and 28% SAUDI ARABIA 21%
PERCENTAGE WHO SAY THEYRE WILLING TO USE DIGITAL OPTIONS FOR GROCERY SHOPPING *
Asia-Pacific 60 I 33 Asia-Pacific 58 I 33
Europe 36 I 33 Europe 35 I 37
Africa/Middle East 47 I 32 Africa/Middle East 48 I 33
Latin America 60 I 25 Latin America 57 I 28
North America 44 I 32 North America 34 I 39
Asia-Pacific 55 I 36 Asia-Pacific 54 I 36
Europe 33 I 35 Europe 29 I 33
Africa/Middle East 48 I 31 Africa/Middle East 46 I 33
Latin America 57 I 25 Latin America 52 I 29
North America 38 I 35 North America 31 I 36
Asia-Pacific 53 I 34 Asia-Pacific 50 I 36
Europe 30 I 30 Europe 27 I 31
Africa/Middle East 49 I 32 Africa/Middle East 45 I 34
Latin America 58 I 24 Latin America 52 I 28
North America 30 I 32 North America 32 I 33
*Note: Among those who say they are not already using specified technology. Percentages may not equal 100% due to rounding.
Source: The Nielsen Global Connected Commerce Survey, Q3 2016
Emerging markets are not the only ones where retailers will
benefit from the mobile explosion. Its already an important
growth engine in advanced markets. In the U.S. in 2016, Black
Friday and Cyber Monday retail sales via mobile devices were up
33% and 34% over the previous year, and Black Friday became
the first day ever to generate over a billion dollars in sales via
mobile devices ($1.2 billion). 4 As retailers continue to improve
the mobile experience and consumers grow more comfortable
transacting on their phones, tremendous growth will continue.
4
Adobe Digital Insights (November 2016).
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