- The pandemic has changed how people shop for groceries.
- A PayPal survey shows that nearly three-quarters of US consumers who shopped for groceries online in the past year will continue doing so.
- Grocery retailers must innovate in areas like payments to make shopping convenient and safe for consumers.
Grocery retailers have been improving in-store experiences and implementing omnichannel strategies for the past few years to accommodate evolving shopping habits. The pandemic dramatically accelerated those efforts as buyers became more reliant on mobile apps and websites to get food delivered to their door. A new survey of US consumers* from PayPal indicates these habits aren’t about to change.
More than three-quarters (76%) of respondents have bought groceries online for home delivery or BOPIS (buy online, pick up in-store) in the past year, and 73% of them plan to continue doing so. For about one in 10, ordering groceries online was a new experience.
The PayPal poll of 1,000 household shoppers in the US provides cues for grocers on how to reshape the shopping experience to meet shoppers’ expectations of an easy, convenient, and secure process. Ultimately, it found that grocery retailers need to cater to users new to online shopping and those already savvy with digital platforms.
Looking ahead to the future of grocery retail
Even as shoppers have gradually returned to physical stores, for many, the convenience and ease of online ordering are hard to resist — 49% of surveyed shoppers feel shopping online for groceries helps save time. But not all user experiences are meeting this consumer demand, with 24% of surveyed shoppers saying they tried to make online grocery purchases but found that websites/apps were not easy to use.
“Grocers need to look beyond just one demographic and think about users who have not bought digitally,” said Thomas Lai, Vice President, Enterprise Sales (North America) at PayPal. “For those non-digital users, ease of use through new technologies like simple payment methods is going to be incredibly important to create habituation and lifetime value.”
For cues on how to adapt, he added, grocers can look at how disruptors have been reshaping consumer expectations in recent years by offering efficient mobile experiences, timely delivery, and extensive inventories.
“Access to consumer data can help grocers better understand what their customers want and offer it at the right value points,” Lai said. “This is a great way to build brand affinity.”
As grocery retailers strive for agility, they are challenged by the complexities of quickly adopting new digital and omnichannel strategies. Top of mind for consumers is security, with more than half of respondents saying they worry about sharing their financial information when making online payments.
“We hear day in and day out in customer conversations that safety and security of shoppers is a major pain point for grocers,” Lai said. “Grocers know this is an impediment to buying online.”
Consumers are also looking for payment method flexibility, with 22% not finalizing their online orders because they weren’t allowed to use the payment of their choice.
Credit cards remain a preferred method of payment for groceries. Meanwhile, QR code payments and alternative payment methods like PayPal have been gaining ground.
Going forward, 93% of shoppers who have used online payment platforms plan to continue doing so, underscoring the need for online food ordering to prioritize supporting multiple payment methods and not risk losing out on sales.
Payment options, security, and simplicity all contribute to creating a positive customer experience.
Customer experience is the deciding factor
Lai said one of the biggest challenges merchants face is keeping customers coming back. “There are so many options out there for shoppers, so offering the right combination of products and experiences is crucial to customer loyalty. This is where data is incredibly important in edging out competition.”
For example, grocers can improve the in-store experience with technology investments in areas such as touchless payments and fast checkouts to expedite the shopping process.
Global grocery retailer Albertsons is adapting to meet consumer expectations by investing in people, inventory, and digital infrastructure.
“We build a closeness at a very fundamental human level,” CEO Vivek Sankaran said during a session at NRF 2022: Retail’s Big Show in January. “Then on top of that, we’re using a lot of technology — personalization, e-commerce, delivery. We’re focusing on creating ‘stickiness’ through loyalty programs, e-commerce, our pharmacies, rewards programs, and so on. We are giving customers added incentives to stay with us.”
Mike McCormick, chief retail officer of Midwest grocery chain Fareway Stores, said they are keenly focused on providing the best in customer service, “We honor what customers have come to know and expect from Fareway, providing second-to-none butcher counters, farm-fresh produce, and to-your-car carryout. The addition of online ordering, curbside pick-up, and in-store self-checkout lanes have further enabled us to meet customers’ needs and make shopping easier, accessible, and more enjoyable. Technology enhancements have allowed us to quickly adopt the newest and most advanced payment methods, including Apple pay, tap-to-pay, digital gift cards, and most recently, PayPal and Venmo,” he added.
New challenges, new opportunities
The scale of change in the grocery and food delivery market is immense, giving grocery retailers opportunities to innovate — and to seek a commerce partner that offers comprehensive solutions to meet increased demand, drive conversions, boost customer loyalty, and improve the overall shopping experience.
Individually, those challenges may be daunting, but enterprises that approach them as a connected whole will create opportunities for profound growth and customer satisfaction far into the future.
* Survey conducted by Maru Group, commissioned by PayPal, October 28th – November 5th, 2021. This was an online survey among 1,000 participants in the US, who were household decision-makers who ordered their groceries online and/or ordered meal kits or food online from restaurants.
Vivek Sankaran’s quote taken from NRF’s blog.
This post was created by Insider Studios with PayPal.