Online Grocery Shopping Halves Compared to Last Year

More than half (52%) of e-commerce grocery shoppers have abandoned online shopping in the past year, according to a study by SymphonyAI. Out of those customers, 60% have returned to shopping at physical stores operated by the same retailer, while 40% have completely stopped shopping with that retailer.

The proprietary research conducted by SymphonyAI Retail CPG indicates that the departure of previous online customers has had a noteworthy impact on the growth of e-commerce revenue. Although there was only a slight 1% decrease in total online revenue growth in Q1 2023 compared to Q1 2022, this decline was overshadowed by a significant 14% decrease in the overall number of online shoppers.

“The overall decline in online customers and their impact on e-commerce growth is significant. Contrary to expectations, the losses are coming not from shoppers who were forced online during the height of the pandemic, but rather those shoppers who had moved online after the pandemic. It’s critical for retailers to understand those customer dynamics and their fast-changing needs to succeed in the critical online channel,” said Laetitia Berthier, head of client engagement, SymphonyAI Retail CPG.

As the SymphonyAI study demonstrates, not all those online shoppers are returning to the same retailer’s brick-and-mortar location to do their shopping. What’s more, when they do, the shoppers are less valuable. The research shows that lost online customers that did revert to the brick-and-mortar location had a reduction in overall spending by 16%, indicating they are fulfilling their grocery needs elsewhere.

Omnichannel customers are taking the lead  

According to the study, shoppers who engage in both online and in-store grocery shopping, known as omnichannel shoppers, have emerged as the most important customers for retailers. In Q1 2023, over 71% of households that shopped online fell into the omnichannel category, and these customers are actively driving sales growth for retailers. The research highlights that omnichannel shoppers play a vital role in the success of e-commerce, contributing to positive sales growth online for the past four quarters. It was also found that customers who transitioned from shopping exclusively in-store to becoming omnichannel shoppers have generated an additional 15-18% in sales growth for retailers over the past three years.

Untapped potential for retailers  

Moreover, over 80% of shoppers who primarily shop in physical stores have not utilized e-commerce for grocery shopping in the past five years. This suggests that retailers still have significant untapped potential to expand their omnichannel customer base. By leveraging predictive models and AI, retailers can identify potential omnichannel customers more effectively. The study shows that even converting a small portion (5.5%) of identified top prospects among in-store shoppers into omnichannel users could result in an additional 1% growth in retailer revenue.

The research emphasizes the immense opportunities available to retailers for increasing digital engagement, driving incremental growth, and fostering customer loyalty. For instance, households that seek private-label products online have contributed to revenue growth of over 10%, as 35% of households purchased own-brand products online.