1. Grocery was the most underpenetrated online sector pre pandemic…
The Grocery sector has been a predominantly offline shopped sector before the covid 19 pandemic, due to its essential nature. Consumers have always preferred to personally check the products before shopping for grocery as it directly impacts their health and wellbeing. Grocery shopping was a weekly/fortnightly affair and predominantly driven by bulk, planned purchases.
2. …but saw 4x growth in 2020, which continued further into 2021
The sudden need to socially distance yourself and purchase products online resulted in 4x growth of Online grocery retail in 2020. Various retailers showed spontaneous response to the changing situation and provided attractive deals and services to fulfill consumer needs. Special hygiene measures, innovations in delivery, payment & logistics have continued to drive online sales and in turn increased the comfort of consumers to purchase grocery online. Even post pandemic, there is noticeable increase in the frequency of online shopping as consumers now perform both impulse and planned purchases. The average order value of Grocery has also risen owing to increase in adoption of purchase categories like Healthy food items, Hot drinks, and Packaged beverages.
3. The online channel has fundamentally altered consumer buying behavior for grocery resulting in 3x increase in purchase frequency…
Ease of shopping online and rise of quick commerce has motivated consumers to make planned as well as impulse purchases online. They have become habituated to shop online as discussed in our previous newsletter: Online shopping is now a Habit. Within the grocery sector, consumer shopping behavior has been altered fundamentally leaning towards impulse and unplanned purchases, resulting in a 3x increase in the monthly frequency of grocery shopping as compared to pre pandemic levels.
4. …due to which service levels (within which fulfillment speed is a top criteria), is key to win in grocery
While making online purchase of grocery, Consumers have reported to give maximum importance to the services provided and quality of product, due to the essential and perishable nature of the sector. The rise in subscription models for Grocery are also leading to increasing importance of Delivery experience. Platform experience is another decision-making criterion which drives online purchases of grocery. These factors will drive growth and hence are the key to win in grocery.
