Consumer confidence is holding steady with 53 percent of U.S. households feeling they are in good financial health in Q4 2017 compared with the same figure in Q4 2016, according to “IRI Consumer Connect” survey results released this week. Despite this stable outlook, consumers are still mindful about their spending and are turning to the internet for money-saving opportunities. In fact, 28 percent of consumers say they buy grocery items online compared with 23 percent in Q1 2016, so the IRI survey also took a closer look at the latest trends in buying grocery, home care and personal care items online.
Results from the IRI survey also examined consumer confidence according to age and 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. Nonetheless, 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, VP 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. 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.”
Online shopping trends
It is no surprise that consumers look for the best possible deals online, but how does this stack up by CPG category? The following showcases how consumers shop online to find lower-priced options (sentiment for total, Millennials, Gen X, Baby Boomers and seniors, respectively, listed below):
- Home care options: 30 percent, 44 percent, 39 percent, 27 percent, 18 percent
- Beauty/personal care options: 32 percent, 46 percent, 42 percent, 28 percent, 18 percent
- Over-the-counter medication options: 21 percent, 28 percent, 25 percent, 20 percent, 16 percent
- Food and beverage options: 20 percent, 30 percent, 26 percent, 18 percent, 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 Gen X, 52 percent of Baby Boomers and 46 percent of seniors say they make fewer unplanned purchases online.
Of course, convenience 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 Gen 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 Gen 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 percent of consumers will download coupons from retailer/manufacturer websites
- 51 percent of consumers will compare prices on retailer websites to find the lowest prices on needed items
- 24 percent of consumers will order online for home delivery
- 22 percent will order online and pick up in store
- 12 percent will use online subscription services for some grocery purchases
- 6 percent will use online meal kit delivery services
As e-commerce gains steam, consumers are looking for a variety of offerings that will enhance or simplify their shopping experience. Delivery—free and/or fast—is quite popular, but desires go beyond that, particularly among younger consumers (sentiment for total, Millennials, Gen X, Boomers and seniors, respectively, listed below):
- Online purchasing with free delivery: 50 percent, 58 percent, 57 percent, 49 percent, 39 percent
- Online purchasing with fast delivery: 36 percent, 45 percent, 43 percent, 34 percent, 25 percent
- Online purchasing with in-store pickup: 33 percent, 44 percent, 43 percent, 30 percent, 22 percent
- Online purchase of freshly prepared items: 28 percent, 42 percent, 34 percent, 24 percent, 17 percent
- Subscription services for frequently purchased items: 22 percent, 31 percent, 30 percent, 20 percent, 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.”
IRI provides new survey results at the end of each calendar quarter covering shoppers’ behaviors and attitudes as they directly relate to their strategies for learning about, purchasing and utilizing CPG and healthcare products, as well as information regarding perceptions of economic conditions and their ability to provide for their families.