Consumers Just Aren't into Buying Packaged Goods Online - eMarketer

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Consumers Just Aren't into Buying Packaged Goods Online

Ecommerce represents a small percentage of overall packaged food and household goods sales

October 11, 2016

Even as consumers gravitate to purchasing books, apparel, electronics and many other items through ecommerce channels, shoppers remain steadfast in their desire to purchase grocery items at a brick-and-mortar store, as explored in a new eMarketer report, “CPG Ecommerce in the US: Expectations and Strategies for Growth” (eMarketer PRO customers only).

Channels Used to Purchase Products According to US Internet Users, by Category, Feb 2016 (% of respondents)

There are many valid, practical reasons for this. The desire to see, touch and smell is understandable when purchasing fresh foods, but several other issues remain. The ability to get products immediately when shopping in-store, the time it takes to create an online shopping account, the delivery costs and the fact that going to the grocery store is so ingrained are just some of the factors that have stymied acceptance of grocery shopping via the internet.

Even as brands acknowledge consumers are beginning to buy packaged goods products through ecommerce channels, they also know the number of consumers who do so is low. Sales through these channels are still a small percentage of overall sales.

Financial services investing firm Cowen and Company examined the ecommerce market in a deep-dive study of Amazon. In February and March 2016, Cowen and Company asked 2,500 US adults where they had purchased groceries in the past 30 days. Nearly eight in 10 (78%) respondents said a supermarket, while 61% said Wal-Mart. Just 8% said online.

A February 2016 study by public relations firm Walker Sands Communications examined the channels US internet users used to purchase various products. Fully 90% of respondents had purchased food/grocery in a physical store in the past year, while 86% had purchased CPG in-store. These shares were much higher than for other categories on the list, including apparel, household goods, books and electronics.

US Grocery Buyers Who Purchase Groceries Digitally, by Percent of Groceries Purchased Digitally, May 2016 (% of respondents)

Similarly, the number of respondents who purchased groceries or CPG via Amazon or another third-party digital retailer was much lower than for nearly every other category, except luxury items.

A May 2016 survey of US internet users by Salesforce showed an even stronger preference for in-store food shopping. Among respondents who had purchased consumer goods in the past 12 months, 95% preferred to buy food in-store. Nearly six in 10 favored physical stores for home goods.

Despite consumers’ preference for buying packaged goods in-store, other studies show that they are at least dipping a toe into ecommerce channels.

Products/Services Purchased Digitally by US Digital Buyers, May 2016 (% of respondents)

Market research and consulting firm TrendSource polled 3,004 US grocery buyers ages 18 and older in May 2016. The survey found 22% of respondents said they bought groceries digitally. But of those that did, 91% said that one-quarter or less was purchased via digital channels. Just 8% said that 26% to 50% of their grocery purchases were done digitally.

When looking just at digital buyers, the percentage that used digital channels for food shopping was higher. A May 2016 survey of more than 1,000 US digital buyers ages 18 to 64 by ad agency DigitasLBi showed that 63% of respondents had purchased food by digital channels recently. However, the food category ranked the lowest among the eight sectors examined.

eMarketer PRO customers can view the full report here.

Get more on this topic with the full eMarketer report, “CPG Ecommerce in the US: Expectations and Strategies for Growth.”

eMarketer releases over 200 analyst reports per year, which are only available to eMarketer PRO customers.


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