Trends

While analysts have been predicting for years that consumer habits would eventually catch up with technology, it wasn’t until the COVID pandemic struck that we finally saw a major shift towards online ordering. User growth for this shopping channel managed to jump from 11.8% to 16.1% in a single retail quarter, and the chairman of Procter & Gamble has stated that ecommerce sales of their products are up 50% so far in 2020. Major industry players, including the CEO of Unilever, have gone on the record to say that they don’t believe that online ordering will revert back to pre-COVID levels after a vaccine is found. If online grocery shopping is here to stay permanently, what does the future of ecommerce look like?

Consumer Loyalty Gets Less Predictable

Brands rely on consistent shopper loyalty to develop new products, make plans for inventory and operations, and create a smart pricing structure. So far, statistics have shown that shoppers are making big changes in their shopping habits and are less loyal when it comes to online shopping than when they’re in brick and mortar retailers.

One major reason for this is because when consumers have to physically travel from store to store, they have an incentive to save time and effort by buying all of their needs at as few retailers as possible. This meant that in the past, retailer competition was mostly all-or-nothing – if a shopper went to Walmart, that could mean a loss of hundreds of dollars for competitors like Kroger or Aldi.

Now that consumers are getting more comfortable with shopping online, all retailers with ecommerce capabilities (which is most of them in 2020) are just a quick click away. This gives shoppers much more choice; they can order their favorite bottle of wine, a private label box of cereal, and a bag of apples from three different retailers in just a few minutes.  

Availability, convenience, and value have been cited as the biggest drivers of new brand selection in the past three months. As “pandemic shopping” has left certain items (notably paper products and household cleaners) frequently out of stock, shoppers are willing to buy what is available rather than wait for a more familiar brand to get replenished. Value shoppers are also looking to buy bulk-sized products to save money, and one way that brands can be more competitive in the online shopping landscape is to offer a wider range of size options that can appeal to these kinds of consumers.

Online Search Sparks Opportunities and Losses

Now that consumers are shopping for groceries online more than ever before, we have more accurate data about how shoppers approach digital search. Interestingly, analysts have found that 81% of grocery search terms on Amazon did not include any brand names. Rather, these searches are need-focused instead of brand-focused. If a shopper needs jelly, for example, they are far more likely to search for a term like “sugar-free jelly” than they are for “Smucker’s jelly.” This opens up tremendous opportunities for private label and discount product manufacturers and could become a pain point for national brands.

Up until now, “point of sale” was a major focus for brands and retailers looking to understand how they could inspire more purchases. In a future that is driven by online ordering, “point of search” will be one of the most significant areas of investment. For this reason, package design is actually going to become more important for ecommerce, not less. By utilizing callouts that are clear and consistent, such as “gluten-free,” “peanut-free,” etc., brands can help retailers deliver the most accurate search results that meet shoppers’ specific needs.

eCommerce does not seem to be going away any time soon. As consumers get more comfortable with delivery and curbside pickup, brands and retailers will both have to adjust their perceptions of shopper behavior and shopper needs. The companies that will thrive and come out on top will be the ones that pay close attention to what, when, how, and why shoppers make choices, and they’ll need to respond accordingly – even if it goes against the old wisdom of what we believed about consumers.