We know from our recent online grocery shopper research that 44.5% of UK adults who regularly shop for food and grocery say they shop for it online at least occasionally. What is particularly interesting is that only 2.1% (4.7% of the 44.5%) say they use online exclusively. Multi-channel shopping is a key feature of online grocery – the vast majority still shop at the supermarket.

With this in mind we thought it would be interesting to consider store loyalty between online and offline among those multi-channel shoppers. It’s a fair assumption that the majority started out in the supermarket, so we are able to consider quite easily whether they have carried their loyalty to their supermarket into the online world – by asking which retailer they shop at most regularly offline and online respectively.

There is a stark difference across the Big 4 supermarkets! For example, an overwhelming 86% of Tesco shoppers who also shop online at least occasionally, use Tesco.com. In contrast, only 52% of Sainsbury’s shoppers who also shop online use Sainsburys.co.uk. Notably, Sainsbury’s loses the majority of those who go elsewhere online to Tesco.com. Our qualitative research suggests many shoppers whose nearest supermarket is Sainsbury’s consider Tesco of a similar quality and yet lower price. Others justify the ‘trade down’ to Tesco as sensible since they use online primarily for branded and commodity goods where price is the most important factor.

Perhaps of most interest is the destination of Morrisons shoppers who also shop online. Morrisons are yet to launch their online offering, and over half (53%) of those who do shop online are using Tesco.com instead. Will Morrisons struggle at launch to regain the loyalty of its shoppers whom have already established comfort and routine with a different online retailer?

Too often when we speak to food and grocery manufacturers we come across the assumption that top-up shops are mainly the realm of the c-store.  However our research highlights that in fact more than half of top-up shopping trips take place in supermarkets.

The important point to remember here is that while top-up shopping trips may have an emphasis on convenience, they are not necessarily about convenience stores.  For shoppers convenience encapsulates a number of factors as well as the proximity of a store to home including availability of parking and a good range of products.  In many cases it is a supermarket, not a c-store that fits those requirements best. 

For further information about this top-up study click here.

The explosion in smartphone take up is hugely important for shopper marketing. Our recent research finds that 37% of UK adults who regularly shop for food and grocery now own a smartphone. Mobile phone penetration sits at over 90%, and with the typical contract lasting just 24 months we predict that mobile commerce in grocery will be a game changer in the near future.

Granted, current ownership is heavily skewed towards younger shoppers at present. But what about all those busy mums currently on a contract with a basic Nokia phone? Smartphones will become commoditised sooner than you might think, they won’t always be a premium product. Tesco knows this - it’s even advertising its latest iPhone app on TV. Sainsbury’s, Morrisons and Waitrose all have apps in some form or another. Our research finds that two thirds of shoppers would consider using digital media in these kinds of way in relation to grocery shopping.

We might not be there yet. Today’s apps are often basic and arguably niche in demand. But the acceleration in growth in huge. Make no mistake, this is the tipping point. To win tomorrow, retailers and manufacturers need to be on top of this today. Find out more about mobile shopper marketing here.

Coffee has great potential. Quality on-the-go coffee is a growth market, machines can be installed and operated at low cost and they occupy only a small footprint of space. Essentially vending machines enable consumers to buy coffee (including premium brands) in places they previously hadn’t been able to - that helps drive underlying demand instead of simply shifting share from one competitor to another. Costa is exploiting the opportunity, announcing recently its acquisition of the 900 machine-strong Coffee Nation business. It plans to open 3,000 ‘Costa Express’ machines in the UK during the next five years.

In other categories vending is a potential means to help offset declining independent retailer store numbers. This is especially important for categories like confectionery, crisps and snacks which rely on independents for a big share of their singles sales.

But what about television commercials on demand actually at the point of purchase?

While browsing the aisles in SuperTarget the other day (US retailer), I stumbled across this

Attached to the fixture on a gondola end, it played the television commercial for the product on a small screen on demand - I just pushed the button. I found myself watching the commercial and looking at the actual product next to it at the same time, picturing whether the mop could be as effective in real life as they suggested it could be on the television. This was different to a TV hanging above with a video on loop. This was at eye level and it caught my eye while I browsed the fixture, and my curiosity sufficiently to push the button.

As I walked away, another shopper - drawn to the sound generated by myself watching the video - followed my lead and pressed play again to see for themselves.

Of course, it’s not going to work for your regular staples - but for other grocery items, non food in particular, it struck me as quite innovative and potentially effective. What do you think?

However we expect that market conditions will test traditional accompaniment categories such as confectionery and crisps. First, cash-strapped shoppers are looking for ways to cut back on their expenditure on more discretionary items. Second, these categories face escalating competition for shelf space at the fixture from the likes of cereal bars, energy drinks and innovative chilled snacks. Finally, with health concerns rising up the agenda, shoppers are increasingly choosing lower fat and lower sugar alternatives. No doubt product engineering is one way to cut prices (or simply fight off inflation) and reduce calories – and this is already working effectively. But the real test going forward for these categories is to maintain their pace of innovation to keep both lunchtime shoppers and retailers excited.

You can read more about Evolution Insights’ Lunch On-the-go research here.

Perhaps unsurprisingly, we find that the majority of online grocery shoppers like the fact that they can manage their budget more easily when shopping online, than in the supermarket. Online grocery shoppers view their exact running total as they add items throughout their journey. Their mental budget is easily be translated into reality, and items are easily removed during or at the end of their journey without concern. 44% say they spend less online versus the supermarket, and the majority of the remainder only say otherwise because they do a different kind of (larger) shop online than offline.

If you look at the big supermarket’s websites, it’s easy to see why this is the case. Items are easily compared by price. The relative balance between price and other characteristics such as feel, packaging, size and quality is heavily skewed towards price online, compared to in the supermarket. In the absence of other less tangible characteristics, shoppers are relatively more influenced by those characteristics they can digest

A number of our accompanied shoppers exhibited quite noticeable price comparison behaviour, rapidly editing range on the screen and then comparing a handful of items in further detail. These shoppers explained that it is easier for them to compare prices of different products online with all the products on the same page in a list with prices aligned.

Manufacturers of premium products should be wary of the potential for greater brand switching online in commodity categories such as laundry detergent, where factors such as packaging, colour and perceived quality are less likely to influence the decision making process than in the supermarket.

Brands do still have the edge, but for how long?

The market for private/ own label has grown substantially over recently years. In part this has been a continuation of a longer-term trend, but the pace of its development has accelerated over recent years as a tougher economic climate has encouraged shoppers to try alternative products in attempt to save money. Many have not switched back. With economic uncertainty escalating, in particular as consumer confidence has plummeted recently (GfK Consumer Confidence Barometer), we expect the growth of private label to maintain, and potentially build, momentum over the next 12 months.

But what about shoppers who do use online grocery? What are their dislikes, and perhaps more importantly, which of these prevent them from using it more often? These are all questions we addressed in our recent Online Food & Grocery: The Shopper Perspective report.So what about existing online shoppers? We asked 1,002 of them for their dislikes. Perhaps unsurprisingly, the most commonly cited dislike is the cost of delivery (58%). 

We also note with interest that only 8.7% of existing online grocery shoppers cite difficulty of use as a dislike regarding online grocery, with similarly low penetration relating to finding the correct item and ordering the wrong item.

So what about dislikes that, if addressed, would lead to shoppers using online grocery more frequently? We know from our research that the majority of online shoppers using the service occasionally, rather than weekly.

86% of online grocery shoppers say free delivery would be likely to make the shop online more frequently. While this perhaps seems obvious, our research suggests that offerings such as Ocado’s ‘delivery pass’, where shoppers pay a flat monthly rate for unlimited delivery can help to improve frequency.A similarly high degree of online shoppers say that extra financial incentives would also be likely to make them shop online more often. Tesco.com is a frequent user of exclusive money off incentives to drive increased frequency, particularly among virgin online shoppers.

Perhaps of most interest is the high likelihood that improved capabilities relating to substitution policy and best before dates would encourage so many to shop online more frequently.  It seem that resource is likely to be better spent improving these capabilities than in improving the usability and range of the website.

First, many shoppers buy online because it helps them to budget more effectively and ultimately save money. They actively avoid impulse purchases and even when they add impulse items to their baskets we find they often remove them before checking out.

Second, features such as favourites lists encourage shoppers to buy from their previous/existing repertoire. These features limit the shopper’s exposure to the wide variety of products they would see when walking around the supermarket aisles.

Third and finally, shoppers are typically more focused when shopping online than they are in-store. We found in accompanied shops that shoppers miss many offers and products that are advertised during their online journey simply because they didn’t see them.