Survey: Shoppers Cool to Net Grocers

Americans are not likely to abandon their local supermarkets to shop for food on the Internet anytime soon, according to a new survey by PricewaterhouseCoopers. In fact, only 18 percent of the 500-plus Internet users who participated in the 1999 PricewaterhouseCoopers Retail Intelligence System annual consumer survey expressed any interest in online grocery shopping.

Grocery shopping is a “highly personal process. Consumers are not yet ready to transfer this caregiving function to a detached process such as online shopping,” said Mary Brett Whitfield, Director of PricewaterhouseCoopers’ E-Retail Intelligence System.

“The category is not ideally suited for the Internet as it is near impossible to translate the grocery shopping experience online,” she added.

Low Consumer Awareness

According to the survey, Web grocers have very low visibility, even among Net shoppers. Compounding the problem is the fact that most online grocery services are available only in a handful of markets.

“The fact that very few Internet users are even aware of the online grocery service options and even fewer have actually tested the options is an indicator of the infancy of this distribution channel for groceries and household essentials,” said Whitfield.

With the recent widespread reporting of online grocer Peapod’s struggle to stay alive, even consumers who know about the availability of online grocery services may be lukewarm about using them.

Fast Delivery Critical

Online shoppers are more willing to wait for the delivery of CDs, books, music, or clothes than for groceries. PricewaterhouseCoopers found that most of the survey respondents would favor an online grocery service model that could provide delivery in a “very tight time frame — thirty minutes — with only a very modest delivery charge.”

Forty-three percent of the respondents said they would be more likely to shop online for groceries through services operated by their regular supermarkets rather than Internet-only grocers. PricewaterhouseCoopers said that consumers view continuing relationships with their regular supermarkets as a way to reduce the risk and uncertainty surrounding online grocery shopping.

Whitfield said, “The ability to deliver groceries to consumers’ homes within a short time frame will be key to determining which online grocery service providers survive and prosper and which fall by the wayside.”

Price Drives Online Shopping

Low prices were cited as the most important reason for shopping online by 22 percent of Internet users. Other factors are product brand, site “shopability,” delivery time, and customer service.

Whitfield said, “In addition to low prices, consumers shop online for groceries because they want easier access to brands and products and because they either do not have time or dislike shopping at stores.”

However, while 42 percent said they are looking for ways to spend less time shopping for groceries, only 11 percent said they would be willing to pay more for products and services that save them time.

Important Factors

Getting grocery shoppers online will require more than just low prices. When asked to choose up to three factors that could entice them to shop online, 46 percent of survey respondents selected free delivery for large orders as their top pick.

Other factors that could attract shoppers, according to the survey, are acceptance of manufacturer’s coupons; ability to set a specific delivery window; ability to create a list of frequently purchased items; ability to pick up at a local store; and unattended home delivery. Twenty-one percent of the respondents said that there is nothing that would make them more likely to use an online grocery store in the future.

Huge Market

The survey showed that primary household shoppers make nearly 10 shopping trips — usually to supermarkets — for groceries every month.

“Although consumers have more choices than ever of where to buy their groceries, supermarkets remain the clear winners, garnering a 59 percent share of monthly grocery shopping trips among online purchasers,” Whitfield said.

She added, “Internet shopping sites, on the other hand, capture just slightly more than one percent of monthly grocery shopping trips. Furthermore, only seven percent of respondents who have ever purchased groceries online indicate that they do more than half of their grocery shopping online while almost half admit to doing very little.”

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