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Grocery Retail Innovation: How the Pandemic Has Reshaped Shopper Behavior

Grocery retail innovation will help grocers capture and retain shoppers during the pandemic and beyond, reveals a new Mercatus shopper survey.

The industry has been forecasting a rise in the adoption of online grocery shopping for some years now, and the pandemic has certainly accelerated that increase at a steep rate. But how else has the pandemic changed shopper behavior? What else can we say about how shopping habits have changed since COVID-19 affected all of our lives? That’s what we wanted to uncover in this year’s Mercatus Grocery Shopper Survey. Our findings have far-reaching implications for how retailers invest in grocery retail innovation for long-term growth.

Extensive survey reach

The survey polled 60,000 respondents in 20 states across the U.S. and then analyzed a total of 48 million data points. The wide scope and large sample size make this a highly reliable study of shopping behavior in the U.S. This also makes it the only in-depth analysis of the pandemic’s effects on shoppers. The survey was conducted in collaboration with accredited third-party research firm Incisiv to ensure an objective, unbiased collection of data and analysis of the findings.

As well as the breadth of data collected, the 2020 Mercatus Grocery Shopper Survey also provided a deeper look at food retail consumer sentiment. We drilled down into specific questions to compare how the varying demographics responded. This enabled us to gauge subtle differences in consumer attitudes across age groups, genders, and income levels. Results are compiled in our report, eGrocery’s New Reality: The Pandemic’s Lasting Impact on U.S. Grocery Shopper Behavior.

View the In-Depth Survey Results Now

The 2020 Survey revealed four key insights about current trends in grocery shopper behavior. We suggest ways in which grocery retail innovation can empower retailers to stay relevant and competitive in a shifting marketplace.

1. Shopper loyalty is divided

Loyalty is a more complex matter than one might think. Our survey revealed some of the reasons why.

grocery retail advertising, graph compares 25% of customers shop online with preferred grocer, 26% in 2020
Online Shopping from Preferred Grocer

For example, 87% of the consumers are satisfied with the experience they get at their preferred brick-and-mortar retail brand and intend to remain loyal. But interestingly, when they buy groceries online, they don’t necessarily shop at the same retailer. Instead, they experiment with different online retail options. While 43% of respondents said they’d shopped online in the last six months, only 26% had shopped at their preferred brick-and-mortar grocer’s online store.

What causes them to shop elsewhere? Searching for deals, product availability, and online order fulfillment options were the most common reasons cited.

This is important information for grocers. Loyal brick-and-mortar shoppers are theirs to convert. When armed with a better understanding of why shoppers turn to other online grocery sites, grocers can improve their own eCommerce experience to convert and retain their loyal in-store shoppers online.

2. Shoppers are satisfied — but want more

We also discovered that while 58% of shoppers said they are satisfied with the online shopping capabilities offered by their preferred brick-and-mortar retailer, they want more. They expressed a desire for more functionality around online promotions and advanced product search features.

Shoppers are experimenting with the various online ordering options available to them. Grocers who want to retain loyalty online as well as in-store must review their eCommerce offering in light of digital grocery leaders in the space. They need to take a critical look at whether their eCommerce experience offers the in-depth features shoppers want to use.

What features do Millennial shoppers want most? Find out by downloading our survey report.

3. COVID has fundamentally changed how we shop

There’s no doubt that COVID has changed the nature of shopping, but we wanted to go beyond speculations based on anecdotal evidence or other retail segments to get a clearer picture of how online grocery shopping habits have changed nationwide.

Nearly half of our survey respondents (46%) said they’d changed where they shop online. Almost as many (42%) shop less often and 34% have started buying new categories online. The top reason for their change? Availability of stock.

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Top Three Reasons for Change

We also asked why people are choosing to shop online. While the top reason stated was concerns over COVID-19 (cited by 62% of respondents), convenience came in a close second at 61%. Time savings was the third-highest ranked, with 42% of respondents mentioning this reason.

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Top Three Reasons to Shop Online

While the pandemic created a sudden and urgent need for online grocery ordering, adoptees also recognize the advantages of this method of shopping. These benefits will almost certainly outlive the short-term pandemic-related needs in the minds of grocery shoppers and convince many to continue buying online.

4. Online adoption will continue to grow post-pandemic

There’s no doubt that online grocery shopping is here to stay. 2020 has been a pivotal year for the accelerated adoption of online grocery because of the pandemic. And those concerns will linger for some time. Our survey found that about 90% of today’s online shoppers intend to continue shopping through this channel.

With continued grocery retail innovation in digital channels and making the online shopping journey smoother and more convenient for shoppers, online grocery will continue to grow steadily post-pandemic. With Incisiv’s help, we ran 25 simulations with 150 different variables to arrive at a median projection of approximately 21.5% of total grocery sales by 2025.

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CAGR for Online Grocery

Grocers who invest in improving the online ordering and fulfillment experience will be rewarded with continued loyalty from those shoppers in the years ahead. The key to winning at grocery retail is to deliver a seamless cross-channel experience that enables shoppers to enjoy a full range of features while doing their shopping how and when they want.

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View all the insights, with full breakdowns by demographic, in the Mercatus shopper survey, eGrocery’s New Reality. Get your copy now!

Want to learn more about grocery retail innovation and strategies for expanding your eCommerce? You might enjoy these resources:

Headshot of Mark Fairhurst

Mark develops global growth strategies for Mercatus and leads the Marketing, Sales, and Customer Experience teams.