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Online shoppers view supermarkets for stock-ups

Benchmarking study also highlights 'lost sale' issue

Supermarkets that also offer online shopping options are generating larger per-order online rings than their “pure-play” e-commerce counterparts, suggesting shoppers view them as “stock-up” solutions as opposed to the more-narrowly focused shopping missions served by virtual competitors, an industry consultant told SN.

In an interview with SN Monday, Steve Bishop, managing partner of Brick Meets Click, said supermarkets’ edge in basket size “has to do with the mix of shopping occasions conducted online.” He said Amazon, for example, appears to be picking off shopping occasions built around replenishment of particular items — sometimes only a few items per basket — while FreshDirect was attracting a greater share of shoppers in search of meal solutions. Online supermarkets, Bishop said, appear to be winning the majority of large-size pantry restocking trips owing to their large selections and longstanding equity fulfilling that role in the physical world. 

Brick Meets Click on Tuesday published highlights from its first benchmarking study on online grocery, a report Bishop said would provide multichannel grocery stores with comparative data. 

The study compared online orders for the same week from 19 multichannel supermarket banners that offer traditional and online grocery service and found that more than half generated online baskets of between $120 and $180. That’s considerably larger than the average online order size reported for FreshDirect ($105) and Amazon Fresh ($84), in a separate study conducted by 1010Data recently.

The study also developed benchmarks for order frequency, lost sales as a percentage of online sales, and percentage of orders with lost sales.

“Lost sales” refers to items that were ordered online but not fulfilled due to out of stocks and that could not be satisfied with substitutes. According to Brick Meets Click, the average dollar amount due to lost sales was 3%, and lost sales affected some 40% of all online orders.

“We now understand the business implications of how broadly lost sales impact customers, and have an opportunity to better understand which lost sales have the biggest impact on customer satisfaction,” Bishop said.

Banners participating in the study received a confidential report showing how their performance compared on each performance metric with a composite average. No individual banner data was released except to the retailer who provided it. Participation in the benchmarking study was also kept anonymous to further protect confidentiality.

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