Consumers are spending more, buying less
It’s a sign of the times: Consumers are spending more but buying fewer items. That’s one of the key takeaways from a new report on grocery e-tailing.
According to the recently-released "State of Digital Grocery Performance Card for Q3, 2022" from research firm Incisiv and digital solutions provider Wynshop, digital grocery sales rose 14.4% in the third quarter but the average shopper basket contained five to six fewer items than the same time in 2021 and four to six fewer items since the first quarter of this year. Tellingly, the average price of items in digital baskets jumped 21% from last year. Another harbinger of inflation pullback is the finding that 73% of shoppers reported that they have switched to lower-priced brands.
[Read more: Strategic moves to drive results this holiday season]
"While digital grocery rose in Q3 compared to Q2, there was a weakening in sales and shopper sentiment in September," said Gaurav Pant, chief insights officer of Incisiv and the information platform Grocery Doppio. "Shoppers are now moving to private-label brands and shifting spending to lower-priced grocery chains."
As higher prices impact shoppers’ baskets, the digital market continues to evolve in other ways. The report shows that digital sales through third-party providers decreased by nearly a quarter (23%) since the first quarter of 2022, and shoppers are showing a greater penchant for buying directly on grocers’ websites. Pickup continues to gain steam for order fulfillment, now comprising 52.8% of all digital orders.
To maximize success in digital and, specifically, pickup, grocers should be mindful of the impact of inventory, the report indicates. The Incisiv/Wynshop research shows that one in six pickup orders this year included at least one substituted item and lost sales due to cancelled e-comm orders spiked to $2 billion.
[Read more: NRF: Consumers still spending despite worries over inflation, interest rates]
"Grocery shoppers have made it clear that they will continue to buy online, and prefer to do so directly from their favorite grocer," noted Charlie Kaplan, Wynshop’s chief strategy officer, adding, "Better inventory visibility and insights into digital shopper purchasing behavior will continue to be critical to achieving profitable online businesses and satisfied grocery shoppers."
More findings are available on the Grocery Doppio site.
This story originally appeared on Progressive Grocer.