Ecommerce 2021

Key insights and recommendations for the grocery retail industry. Discover the potential value from your online channel

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Contents

1. Introduction

2. The 6 Main findings

3. A small but important channel

4. The importance of converting existing instore shoppers to omnichannel

5. Driving customer loyalty

6. Increased customer spend

Symphony RetailAI’s analysis of Q1 2021 shopper data highlights omnichannel as - a key driver of loyalty and total spend.

Shopping habits and behaviours are in the midst of great change and the pandemic has without a doubt, fuelled more customers than usual to switch online or compliment their in-store visit with online purchases, and these customers are here to stay. Whilst we see about half of shoppers abandoning the online channel after just one purchase online, those who remain engaged spend more and become more loyal.

 

This paper seeks to carry out a deep-dive into the data of our participating grocery retail partners to see; through the eyes of the customer, what challenges and opportunities grocery e-comm poses now and in the future. Additionally, this insight paper seeks to re-enforce the importance of de-averaging your customer-base, allowing you to sharpen your proposition and plug investment where it will garner the greatest return.

1. Symphony RetailAI’s - 6 main findings show:

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  1. Channel Value - Whilst still a small part of total commerce, (8%in Q1-2021) online sales contributed >50%of total revenue growth during the same period, up 20ppt from Q4 the previous year. There has been a steep and steady increase since a year ago.
  2. Customer Value - Customers who join the online channel to complement their in-store shop have shown to grow their loyalty and remain more loyal. Increase in spending from these customers reached up to +20% in some cases. The data shows that if a customer returns to the channel 7 times in the first 3 months of joining, they are 3.4xmore likely to become a long-term customer compared to a shopper who made only 2 visits.
  3. Customer Value & Retention - The long-term engaged customer is nearly 4x more valuable than those not considered long-term. Whilst only a 3rdof your online customer-base, they represent >half of the revenue for the channel, so it pays to invest in them, in order to retain them.
  4. Magic Number – The data shows that if a customer returns to the channel 7 times in the first 3 months of joining, they are 3.4xmore likely to become a long-term customer compared to a shopper who made only 2 visits.
  5. Key Items - Our data points to a declining trend in key items. Not having the right key items can mean anywhere between 3-5% loss of sales. Retailers also need to strike a better balance across their key value and key quality items, we see a widening gap in key quality items compared to in-store, the risk is that customers are forced to trade down or will shop elsewhere.
  6. Untapped Opportunities - In the post-pandemic world, as customers seek convenience, speed and improve quality of life inside the home, be sure to capture untapped range opportunities in categories that would typically see lower customer penetration in-store. This could be worth up to +1.8%potential additional sales.

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