Internet Playing Integral & Growing Role in CPG Purchase Process

CHICAGO — Consumer confidence is holding steady with 53 percent of U.S. households saying that they are in good financial health in Q4 2017 vs. the same figure in Q4 2016, the latest IRI Consumer Connect survey found.

Despite this outlook, consumers are still mindful about their spending and are turning to the internet for money-saving opportunities. Twenty-eight percent of consumers say they buy grocery items online compared with 23 percent in Q1 2016.

Examining consumer confidence, IRI found that 47 percent of millennials, 45 percent of Generation X, 51 percent of baby boomers, and 68 percent of seniors are feeling good about their financial health. Additionally, 31 percent of consumers in Q4 2017 said they are struggling to buy needed groceries compared with 30 percent in Q4 2016.

“While consumer confidence has improved during the last few years, consumers can still be a bit shaky about their job and financial prospects, so we’re seeing some mixed signals in our survey results,” said Susan Viamari, vice president of Thought Leadership for IRI.

“Many, especially younger consumers, say they think the internet provides money-saving opportunities, so we wanted to dig further and find out what role online shopping is playing in consumers’ CPG spending," she added. "Consumers are certainly not going to do all of their CPG shopping online, but marketers must keep in mind that 76 percent of all shopping trips begin online and 50 percent of CPG category growth is predicted to be online in 2018.”

When it comes to the CPG category, this is how consumers who shop online for find lower-priced options stack up:

Home care options:

• Total — 30 percent
• Millennials — 44 percent
• Gen X — 39 percent
• Baby booms — 27 percent
• Seniors — 18 percent

Beauty/personal care options:

• Total — 32 percent
• Millennials — 46 percent
• Gen X — 42 percent
• Baby booms — 28 percent
• Seniors — 18 percent

Over-the-counter medication options:

• Total — 21 percent
• Millennials — 28 percent
• Gen X — 25 percent
• Baby booms — 20 percent
• Seniors — 16 percent

Food and beverage options:

• Total — 20 percent
• Millennials — 30 percent
• Gen X — 26 percent
• Baby booms — 18 percent
• Seniors — 11 percent

The IRI survey also revealed that consumers think shopping online provides the added benefit of reducing their impulse purchases. Overall, 51 percent of total shoppers, 54 percent of millennials, 55 percent of Generation X, 52 percent of baby boomers and 46 percent of seniors say they make fewer unplanned purchases online.

Convenience also plays a big role in online shopping, with 20 percent of consumers saying it is easier to find needed grocery items online. By age, 32 percent of millennials, 28 percent of Generation X, 16 percent of baby boomers and 12 percent of seniors say they find items more easily.

Ordering online with in-store pickup (click-and-collect) provides convenience without the added shipping fee. While 40 percent of total shoppers like this convenience, 55 percent of millennials, 52 percent of Generation X, 36 percent of baby boomers and 25 percent of seniors specifically like click-and-collect options.

In the upcoming year, the Internet will play an integral and growing role in the CPG purchase process:

• 55% of consumers will download coupons from retailer/manufacturer websites
• 51% of consumers will compare prices on retailer websites to find the lowest prices on needed items
• 24% of consumers will order online for home delivery
• 22% will order online and pick up in store
• 12% will use online subscription services for some grocery purchases
• 6% will use online meal kit delivery services

As e-commerce gains traction, consumers are looking for a variety of offerings that will enhance and/or simplify their shopping experience. Delivery — free and/or fast — is popular, but desires go beyond that, particularly among younger consumers:

Online purchasing with free delivery:

• Total — 50 percent
• Millennials — 58 percent
• Gen X — 57 percent
• Baby booms — 49 percent
• Seniors — 39 percent

Online purchasing with fast delivery:

• Total — 36 percent
• Millennials — 45 percent
• Gen X — 43 percent
• Baby booms — 34 percent
• Seniors — 25 percent

Online purchasing with in-store pickup:

• Total — 33 percent
• Millennials — 44 percent
• Gen X — 43 percent
• Baby booms — 30 percent
• Seniors — 22 percent

Online purchase of freshly prepared items:

• Total — 28 percent
• Millennials — 42 percent
• Gen X — 34 percent
• Baby booms — 24 percent
• Seniors — 17 percent

Subscription services for frequently purchased items:

• Total — 22 percent
• Millennials — 31 percent
• Gen X — 30 percent
• Baby booms — 20 percent
• Seniors — 11 percent

“When consumers think about online CPG shopping, they have specific ideas about what is helpful in their lives,” added Viamari. “There really is no one-size-fits-all answer, so it’s critical to understand what it is that makes your key shoppers tick.”