2023 Trends: BOPIS vs In-Store, Generational Differences and Quick Commerce
Throughout most of 2020, consumers changed the way they shopped due to the COVID-19 pandemic. To avoid risking their health, consumers opted for non-contact services like buy online, pick up in-store (BOPIS) and ship-to-home instead of going to physical stores. As a result, eCommerce grew significantly, and online shopping became more popular than ever. However, the online growth seen during 2020 and 2021 has started to slow down and return to pre-pandemic levels. This is similar to how people started to return to their normal lives, and so did shopping behavior. Many brands and retailers are wondering whether eCommerce is done growing and what the online grocery trends for 2023 will be.
In 2023, we can expect the evolution of online grocery shopping behavior as terms like quick commerce and grocery delivery gain popularity. New modalities of shopping will take center stage across different consumer groups.
How has eCommerce grown since COVID?
The story of the rise and fall of eCommerce during the time of COVID is simple. At the beginning of 2020, eCommerce was growing exponentially among consumers because it became a necessity during the pandemic. Consumers used online shopping more frequently to avoid crowds and stock up on essentials. As a result, perishables and grocery items started to enter digital baskets. eCommerce was no longer just for good deals or convenience, it became a necessary part of life. In prior research conducted by Numerator, the acceleration of eCommerce was four times higher than pre-COVID predictions for many perishable categories.
Although the growth was exceptional, brands and retailers faced a troubling situation in being unable to sustain the growth trajectory. By the end of August 2022, eCommerce grew only 7% year over year compared to the end of 2021 when growth was at an all-time high of 76%. However, this is not the end of eCommerce’s story. As the world settles into a new normal, brands and retailers can expect a digital shopping renaissance if they drive granularity in looking at online consumer trends across the various types of shopping modalities and across consumer groups.
Gen Z vs Millennials: Online Shopping Behavior
Modality Matters
To grow eCommerce in 2023 and beyond, brands and retailers need to concern themselves with one thing: distilling down the differences in modalities. Modalities are the way that consumers shop, whether that is in-store, online or through delivery. By breaking down behavior across these offerings and learning how different generations shop online, brands and retailers can discover growth in 2023. Numerator found that Gen Z and Millennials continue to lean into the eCommerce channel. For these two generations combined, eCommerce growth rate sits at 12%, signaling growth potential in the long run should brands continue to invest in the space.
Looking more granularly at eCommerce, Millennials and Gen Z are delivering topline eCommerce sales in very different ways. Millennials and older generations are only up in Ship-to-Home, while Gen Z is the only generation that is continuing its growth in buy rate year over year within Click & Collect. In fact, Gen Z is doubling down on Click & Collect and has grown heavily in adoption, showing that if you can win the first trip, you can build their loyalty. Nearly 2 in 5 Gen Z consumers make their first trip online for skin care, and Gen Z shoppers that are new to Click & Collect are 25% more likely to look for face care ingredients that are safe and natural or organic compared to existing Gen Z Click & Collect users. Digging deeper, these Gen Z consumers are going to Target for these trips.
Shopping in-store vs BOPIS: Behavior Trends
Digital Planogram
To curate a basket specifically for Millennials, modality plays a crucial role. Millennials tend to purchase candy and breakfast products more frequently through BOPIS compared to Gen Z. However, this trend does not always hold when we compare Millennial BOPIS purchases against general in-store and ship-to-home purchasing. In those cases, we find that more impulse categories such as candy and alcoholic beverages, along with perimeter items, are more likely to be purchased outside of a BOPIS trip.
Looking at an entire week of a Millennial’s shopping habits, we discover that over 4 out of 5 BOPIS trips are followed by an in-store trip within the same week. This in-store trip typically includes the impulse categories we mentioned earlier, as well as frozen goods. It turns out that Millennials still enjoy the spontaneous discovery of new products and are concerned about product freshness with BOPIS orders.
To maintain a pulse on what consumers need, brands and retailers will need to analyze their shoppers’ baskets and understand the nuances and variances between trips and why there are imbalances between modalities. To shift those follow-up in-store trips to online, Millennials need increased messaging that they can trust a retailer to provide the best frozen and fresh goods in BOPIS trips, and they need the opportunity within a site to explore impulse categories more easily.
Quick commerce vs eCommerce?
Consumers are increasingly turning to delivery services to fulfill their quick commerce and impulse purchasing needs, as it provides instant gratification without having to leave home. Brands and retailers can leverage this trend to meet the needs of Millennials and other generations.
The delivery landscape is expanding rapidly, with more than half (52%) of Instacart buyers also using other delivery services such as DoorDash, UberEats, and GrubHub. Additionally, 25% of DUG purchasers are using these services to buy groceries, with 86% intending to shift to DUG for groceries in the future. This growth potential in quick commerce presents new distribution channels and occasions for brands to align their strategy for growth.
For example, nearly half of grocery delivery users say their trip came from a drug store, and within the past year, over 280 million trips have been made on DUG platforms with 30 million of them being made late at night. Brands should ask themselves: Could I offer a service that could allow a late-night snack from a fast food store be replaced with my packaged cookies? However, there are unique insights and challenges facing third-party delivery services and quick commerce. Fulfillment workers can overlook items or be unfamiliar with a store, leading to missed purchases and a poor experience for customers. Overall, categories that are not intuitive to pack and deliver can face contraction with 40% of delivery customers saying they will only purchase categories through delivery if they are easy to purchase.
Promotions are also important to consumers, with 75% browsing before choosing a service. Competitive promotions can influence non-users to start using delivery services as those who are currently not using the service, 37% claimed that more competitive promotions would influence them to start using the service.
To foster the delivery experience, brands and retailers need to create a meaningful connection with fulfillment workers by enabling access to inventory management and giving guidance on shelving locations. Trade spending should also be carefully allocated to promote across the omnichannel landscape. By addressing these challenges and opportunities, brands can meet the demands of consumers seeking quick and affordable delivery options.
How to Get Insights on Online Grocery Delivery & Promotions
Brands and retailers have an opportunity to grow their eCommerce business, but they haven’t fully explored it yet. This is because current market solutions are not detailed enough or single-source to show how consumers are interacting with brands online. However, Numerator is innovating in the space by offering trended reporting across order and fulfillment methods called “Order & Delivery” using their Total Commerce panel. Numerator is also providing insights into promotions within the grocery delivery space, by tracking promotions from leading retailers offered on Instacart, DoorDash and GoPuff. This offering gives leaders an understanding of the complete customer journey online and helps proactively grow their business in digital.
