While marketers in many countries are worried about a recession, there is also optimism regarding the business climate and marketing budgets.
Online shopping habits may hinder the introduction of new products
By our News Team | 2023
If a product isn’t in a person’s cart by their first five or six online orders, it’s very unlikely that the product will ever make it in.
Online grocery carts tend to include less variety and fewer fruits and vegetables than those in a trip to a brick-and-mortar supermarket. But, on the other hand, online shoppers are less susceptible to unhealthy impulse buys.
This is according to new research by Cornell University in the US, which analysed nearly two million shopping trips for a study titled ‘Browsing the Aisles or Browsing the App? How Online Grocery Shopping is Changing What We Buy’, published in the peer-reviewed academic journal, Marketing Science.
The authors found that, within a given household, online shopping baskets are more similar to each other from week to week than in-store shopping baskets.
Photo by Karolina Grabowska from Pexels
Nutritionally, though, online shopping baskets had 13% fewer fresh vegetables. But, at the same time, online shoppers made up to 7% fewer impulse purchases – such as sweets, baked goods and chips.
These systematic shopping pattern differences can have implications for consumers as well as retailers.
“This affects a lot of things – how brands are competing [and] how grocery markets are competing,” researcher Jura Liaukonyte said.
“There’s a new equilibrium. Online shopping penetration has increased significantly [and] while it is not as high as it was during the peak of Covid, it remains considerably higher than pre-pandemic levels.”
For this work, the authors examined data by Numerator, a market research company that analyses brick-and-mortar store purchases, as well as online purchases from the same participants.
The researchers’ algorithm looked at three years’ worth of grocery purchases from 4,388 participants to get a sense of their typical in-store and online carts.
They discovered a few key differences:
- Online basket variety is around 10% lower compared to brick-and-mortar basket variety within the same household.
- Online shopping trips are 27% more similar to each other than offline trips within the same household when comparing categories.
- The number of overlapping items in online shopping baskets is more than double that of in-store carts when comparing items across successive trips to the same store.
One reason for the reduced variety in online baskets, the researchers suggest, is the ‘buy it again’ feature available on many online shopping apps.
Explanation aligns with observations
“We can’t definitively say that this is the precise reason the online carts are more similar, as we cannot directly observe users utilising this feature,” researcher Nathan Yang said. “However, it’s an explanation that aligns with our observations and informal conversations with consumers about their [online] shopping habits.”
Overall, Liaukonyte noted, the findings of the paper indicate that there might be greater consumer loyalty and inertia when shopping online.
“If we don’t pay attention, we might fall into [the habit] of repeatedly buying the same items online. This seemingly simple online convenience could make us less sensitive to price changes and limit product discovery, enhancing the pricing power of existing brands.”
Researcher Sai Chand Chintala adds that the heightened brand loyalty and consumer inertia could make it difficult for new brands and products to enter the market.
“Industry reports suggest that if a product isn’t in a person’s cart by their first five or six online orders, it’s very unlikely that the product will ever make it in,” he said. “This highlights the importance for brands to advertise early on to ensure they are top-of-mind for consumers and make their way into their baskets.”
Yang noted that traditional in-store promotional strategies, like product displays and samples for product discovery, don’t translate seamlessly to online settings.
“Brands need to rethink their online product introduction methods, potentially leaning more on sponsored listings to ensure visibility,” he said. “The long-term impact of these trends on online grocery shopping remains to be seen.”
You can find out more about the research here.
US industry body warns marketers to be vigilant as programmatic media is ‘complex’ and ‘can be non-transparent’.
Dentsu says big events like the Euro 2024 soccer finals and US presidential election will help to push up spending.
Look for transparency, check results of previous projects, and request an air-tight scope of partnership, advises industry expert.
AMC’s range of Short Courses is designed to complement the study and career-growth initiatives offered by our member countries.
More people also took advantage of deals to buy everyday items, rather than spending on big-ticket luxury goods.
Bath and body well-being brand creates a 3m-high candle and lights it in a busy Christmas shopping precinct to encourage people to ‘reset’.
Data from 2008 recession indicates that, in another recession, the amount spent on higher-priced Fair Trade goods may actually increase.
Interbrand study says lack of growth mindset, weaker brand leadership and poor forecasting are among the key reasons.
Tlali Taoana has experience in strategy, marketing and executive roles, and will expand the capabilities of the business.
AMC President flies the flag at the World Marketing Forum in Thailand, then welcomes Tunisia as the confederation’s 11th member.