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More consumers are shopping for groceries online, including those who have taken a COVID-19 financial hit
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Consumers who have been furloughed, become unemployed or faced other COVID-19-related challenges, have turned increasingly to e-commerce to find the best deals on groceries and consumer goods, according to Nielsen data.
As stores shuttered and social distancing became a top concern, all shoppers turned to digital shopping. According to the latest from eMarketer, U.S. e-commerce is forecast to grow 32.4% in 2020, reaching $794.5 billion.
But for these “constrained” consumers, not just in the U.S. but around the world, online shopping has become even more important.
“[Online channels] are an essential way to research, compare prices and hunt for the right deals before deciding whether to leave home to make the purchase at a physical store or buy it online,” the Nielsen report said.
Nielsen looked at categories of items sold at grocery stores, drug stores, some dollar stores and warehouse clubs and other retailers where things like groceries are sold.
The data found that of those who had experienced coronavirus-related financial impacts, 31% were new to online shopping and 30% were shopping online multiple times per week.
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Among those who are “insulated,” or hadn’t been affected in this way by the coronavirus, only 18% were shopping multiple times per week.
“The evolution toward online reliance among constrained consumers stands at odds with the pre-COVID-19 perception that e-commerce would gain the most traction among consumers with greater financial muscle to flex,” Nielsen wrote.
However, now that more retailers are offering free delivery or the option to pick up a purchase curbside at no extra charge, online has become a more affordable option.
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“Driven by frugality, constrained consumers are now the most active omnichannel shoppers: Compared with insulated consumers, they search more online, browse more frequently, pay closer attention to pricing, and they have more time to do so,” Nielsen said.
For some retailers, this presents an opportunity to grab market share.
“[D]iscounters have historically been a key resource for shoppers with limited funds. The discount channel, however, is among the least present online,” Nielsen said.
To be sure, everyone loves a good deal. LendingTree data shows that 35% of all U.S. grocery shoppers are using coupons now more than they did before the pandemic.
But LendingTree acknowledges couponing has greater meaning for those who need to stretch their dollars.
“For the millions of Americans whose financial lives have been shattered by the pandemic, coupons can be a crucial way to extend a limited budget,” the LendingTree report said.
LendingTree found that groceries are costing U.S. households about $100 more per month during the coronavirus. However, 40% of shoppers said they were taking fewer trips to the store to spend that money.
E-commerce is also growing among (SNAP).
The latest data from analytics company IRI also shows an increasing number of those who receive those who receive assistance from the Supplemental Nutritional Assistance Program (SNAP) shopping for groceries online, with items like frozen meals and bottled juices particularly popular.
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IRI suggests retailers cultivate a relationship with these shoppers by posting promotions online earlier in the month, waiving fees, offering healthy meal solutions, and providing content that will help recipients budget for their meals.
“Understanding how consumers use online, whether as a resource or an actual purchasing channel, is critical for all manufacturers and retailers,” Nielsen said. “The arrival and duration of the pandemic has proven just how dominant omnichannel shopping has become.”
The Amplify Online Retail ETF IBUY, -0.35% has skyrocketed 88% for the year to date. The Consumer Staples Select Sector SPDR ETF XLP, +0.12% is up 5%. And the Dow Jones Industrial Average DJIA, -0.03% is down 0.2% for the period.
