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Omnichannel grocery shoppers shop more frequently and spend as much as 20% more compared with in-store-only shoppers, Symphony RetailAI research found.

Omnichannel shoppers pay off for grocery chains

Symphony RetailAI identifies ‘Amazon effect’ sales opportunity for low-penetration, in-store categories

Omnichannel grocery shoppers shop more often and spend up to 20% more versus in-store-only shoppers, new research from Symphony RetailAI shows.

What’s more, supermarket chains highlighting nonfood product categories online could create an “Amazon effect” and snare incremental sales with a one-stop shopping experience, Dallas-based Symphony RetailAI said Wednesday.

The findings come from shopper data collected across Symphony RetailAI’s customer base of leading grocery retailers during first-quarter 2021, encompassing 421 million baskets in the United States and Europe. The company specializes in artificial intelligence-based marketing, merchandising and supply chain solutions for grocery retailers and CPG manufacturers.

Symphony RetailAI said that although its research indicated that half of shoppers abandoned the e-commerce channel after one online purchase, those who stayed engaged became more loyal. In turn, retailers able to retain online and omnichannel shoppers — and nudging in-store shoppers to make online purchases — will gain long-term loyalty.

Customers already are making more repeat purchases. Of shoppers making an online purchase in Q1 2021, seven out of 10 returned and bought again within the same quarter, up from five out of 10 in Q1 2020, Symphony RetailAI said. Its data also showed that if online customers return to the channel seven times in the first three months, they are three times more likely to become a long-term engaged customer.

One-third of customers are deemed as long-term engaged; however, they represent more than half of all online sales, making them four times more valuable, Symphony RetailAI noted.

“Because most grocery retailers operate with narrow margins, it’s important for them to find ways to gain more share of wallet while building customer loyalty,” Chris Koziol, CEO of Symphony RetailAI, said in a statement.

“Providing customers with an online channel to shop how and when they want is a key differentiator, as we see with the increasing loyalty of omnichannel shoppers observed in our data,” he explained. “Therefore, the online grocery trend should be seen as a win-win omnichannel scenario, not a matter of ‘bricks versus clicks.’ Our recommendation to retailers based on these insights is to focus on the complete customer lifecycle and buying journey with an emphasis on driving repeat purchases to build long-term engagement.”

Year over year, online grocery sales doubled in Q1 2021, accounting for 8% of total grocery sales, Symphony RetailAI reported. Perhaps more important, online sales contributed 50% of total revenue growth in the sector during Q1 2021, up 20% from before the pandemic.

Within that growth, there’s also the potential for grocery retailers to create an “Amazon effect” by spotlighting untapped product categories, notably in nonfoods, Symphony RetailAI said. The research revealed that only 15% of retailers’ in-store nonfood inventory was also purchased online. 

As more consumers seek convenience in a post-pandemic retail environment, grocers can broaden their online offerings in nonfoods and promote a one-stop shopping experience, realizing up to 1.8% sales growth from low-penetration, in-store categories, according to Symphony RetailAI’s research.

“A retailer with an omnichannel strategy puts the customer — not corporate processes — at the center of its strategy,” Koziol noted. “To make omnichannel profitable, grocers need to understand their customers, provide them with the goods and services they want through any retail channel they desire, fulfill their purchases quickly and efficiently, and offer outstanding customer service. Now more than ever, it’s crucial for retailers to leverage AI and machine learning to quickly identify and execute customer-centric opportunities, with agility and precision that engage and encourage loyalty.”

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