A Look Back at 2019: The Year of the Shopper (Part 1)
With more trips comes more opportunity, but also more competition. Despite growth across the industry as a whole, many retailers and manufacturers still struggled, especially well-established powerhouses we’ve come to know and love. But the future is not bleak for retail; in fact, it’s brimming with possibility. As we look back on 2019— the trends, the shoppers, and the market leaders— we begin to see just how many opportunities lie in wait. What can retailers and brands learn from last year’s performance, and how can they set themselves up for success in 2020?
In 2019, shoppers spread their dollars across many different retailers— even within the same category. Gone are the days of strict loyalty. Over the course of the past year, the average shopper bought their groceries at 18 different banners, health & beauty products at nine different banners, household goods at eight, and home & garden at seven. What does this mean for retailers? Just because you won a consumer’s business in a given category, doesn’t mean your job is done. Earning their repeat purchases is just as critical as earning their business in the first place.
Between 2018 and 2019, we saw an increase of roughly 5.4 billion trips overall— and 75% of this incremental trip growth came from outside of the food, drug and mass channels. The largest driver of this incremental growth was online sales— while online shopping represented only 9% of trips in the market overall, it accounted for 26% of incremental trips. The takeaway? Online is absolutely essential if your business hopes to continue capturing new shoppers and trips.
Tapping into Online Shopping Growth
We know online is important, and attitudes collected through Numerator Psychographics data suggest that its importance will only continue to grow. Online shopping appeals to buyers for many reasons, including convenience— 61% of shoppers buy online to save time— and simply because it’s fun— 53% shop online because they find it enjoyable.
Not surprisingly, Amazon is claiming the biggest piece of the online shopping pie, capturing significantly higher household penetration and trip frequency than any other online retailer. However, they still have an opportunity to grow loyalty. Compared to other major retailers, Amazon’s share of wallet among closers is in the middle of the pack, and is far behind Walmart.
Though Amazon is undoubtedly powerful, it has only scratched the surface of its shoppers’ potential spend. The average Amazon shopper has purchased roughly 24 categories from Amazon— 1.7% of potential categories, given the breadth of what’s available at the e-tail giant. In comparison, Walmart shoppers purchase 7.2% of potential categories available.
Online Push is Worth the Effort
In addition to Amazon, big hitters like Walmart and Target upped their online game in 2019. While Walmart pushed free same-day grocery pickup, Target heavily promoted curbside pickup and Shipt membership, which promises same-day delivery of food and essentials.
So why such a push online? Numerator data shows that shoppers eventually spend more with the retailers and categories they interact with online. A number of categories see increases in net buy rate from a shopper’s first online category purchase, including face care, nutrition & wholesome bars, water, and coffee. Categories with a shorter shelf life, such as cheese, tend to see lower growth.
In acknowledging the importance of online shopping, it’d be a mistake to overlook traditional brick-and-mortar shopping, which still accounts for 93% of trips for major CPG products. Stay tuned for part 2 of this post to learn how brands and retailers can drive in-store trips and continue to maintain a stronghold in an increasingly online retail world.