Making Sense Of 2020 Grocery Trends: Online Shopping, Frozen Foods, Meat

Grocery e-commerce platform Marcatus and consumer industry insights company Incisiv detailed in a new study current and future trends in the physical and online grocery space.

Marcatus And Incisiv's Findings

Marcatus and Incisiv analyzed relevant industry data and surveyed 60,000 people across 20 states to better understand the grocery industry.

Brand Loyalty: Nearly nine out of 10 shoppers are satisfied with their physical grocery store and will remain loyal to their preferred retail brand, according to the study.

But the same can't be said for online shopping, as consumers have shown a tendency to buy from different online retailers. Fifty-eight percent of shoppers are happy with the online shopping version of their preferred grocery store.

Overall adoption of online grocery shopping has grown by nearly 200%, but the number of shoppers buying food online from their preferred store has not grown.

Among customers who shop for groceries online, an estimated 90% said they will continue doing so in a post-pandemic environment.

Shopping Preference Changes: The global COVID-19 pandemic notably accelerated online grocery shopping trends. The pandemic was the largest contributing factor in prompting changing consumer habits, followed by convenience and time savings, according to the study. 

Third-party marketplaces and delivery providers like Instacart were twice as likely to be preferred compared to those that operate strictly online businesses.

For those who continued to shop offline, curbside and home delivery replaced in-store pickup. Grocery stores that faced execution challenges were quick to lose customers who switched to a rival that offered a better shopping experience.

Shopping Preferences By Category: Customers are flocking to online channels to buy mostly packaged and non-perishable products. While fresh food and meat adoption improved, it ranks the lowest at just 19% consumer adoption.

Bulk and heavy items ranked the highest, with 47% consumer adoption, followed by pharmacy and household personal care, at 42% each. 

Online Growth Through 2025: Online grocery sales as a percentage of total grocery sales are expected to rise from 10.2% in 2020 to 21.5% in 2025, according to Marcatus and Incisiv. 

Estimates prior to the pandemic modeled online sales as a percentage of total sales to rise from 4.3% in 2020 to 13.5% in 2025.

"Amidst the changing needs of customers and increased demand for eGrocery, retailers need to deploy digital functionalities to ensure online shopping is frictionless," the study said. "Long-term winners will be the ones who make the right investments in digital and deliver a seamless cross-channel experience."

Talking Trends With Signals Analytics

Frances Zelazny is the CMO at Signals Analytics, an advanced analytics company. Benzinga had the opportunity to ask Zelazny a few questions about trends in the grocery space. 

Winners And Losers: Grocers that don't leverage their technology to allow pickup options will lose the most, Zelazny told Benzinga in an email.

This emphasizes the urgency for grocers to embrace technology and innovation to serve their customers, the CMO said. 

Consumers remain on edge, as some cities continue to experience high coronavirus infection rates. People are naturally looking for ways to avoid contact with strangers.

"Stores that can offer pickup options that don't require someone to go into a physical space will gain loyalty while others will lose out on opportunity," she said.

Frozen Food Opportunity: It shouldn't come as a surprise that online shopping for fresh food and meat are showing weak trends, Zelazny said. But this provides an opportunity for frozen food makers to offer consumers an alternative to fresh that can be just as nutritious, she said. 

"The frozen vegetable aisle in particular has undergone a sort of resurgence: being able to buy and store healthy foods, including greens, suddenly seems like a luxury." 

Future Of Meat: Data collected by Signals Analytics also points to a broader decrease in demand for meat as consumers embrace semi-vegan or flexitarian diets.

People are more aware of unhealthy qualities in certain meats that are associated with high cholesterol and obesity, Zelazny said. 

"Signals Analytics has found that a lot of emphasis is being placed on healthier meat substitutes such as tempeh and seitan." 

Permanent Trends: Expectations for online grocery sales to continue growing as a percentage of total sales are based under the thesis that shoppers will be "reluctant to go back to how things were," Zelazny said.

Consumers will embrace the added convenience of online grocery shopping, while latecomers will continue investing in their own online grocery capabilities.

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