Barbara Connors, VP of commercial insights, 84.51°
Hybrid shopping across physical and digital channels will continue growing in the post-pandemic “new normal.”
Chain Store Age recently spoke with Barbara Connors, VP of commercial insights at 84.51°, the data analytics subsidiary of Kroger, about the ongoing evolution of hybrid shoppers who merge their physical and digital retail activities.
Connors provided an update to commentary provided by Michael McGowan, senior VP of commercial insights and loyalty for 84.51°, offered in September 2021 about the emergence of hybrid shoppers as a major consumer segment during the peak period of the COVID-19 pandemic.
What factors are driving continued hybrid shopping usage post-peak COVID-19? COVID-19 was the catalyst for an acceleration of e-commerce adoption. Hybrid shopping, the use of both e-commerce and in-store modes to fulfill different grocery trips, is still occurring at a rate two times higher than pre-pandemic, having maintained popularity even as we have progressed beyond the peak of the pandemic. This is because the increase in options has provided shoppers with the ability to choose which method is preferred for any given shopping trip.
In-store is still the preferred choice for fulfilling the main grocery trip, special trips and when shoppers need to pick up a few items ASAP. Hybrid shoppers also prefer to go in-store when they want to browse. This is critical when shopping for special occasions, but it is also a driving factor when shoppers want to discover new items or look for promotions.
However, hybrid shoppers now lean on e-commerce to save time, save money and streamline their shopping experience. In fact, many shoppers even use this method to help stick to a budget and avoid adding items beyond their list.
How would you define the key hybrid shopper personas? Hybrid shoppers exist across a continuum, ranging from the newcomer to the seasoned online shopper. One way to understand differences and similarities in personas is to examine shoppers at each end of this spectrum. We’ve coined those who have low loyalty to e-commerce, the ‘Digital Dabblers,’ and those who are highly loyal to e-commerce, ‘Digital Champs.’ Shoppers on both ends over-index with millennial parents, but there are also some noticeable differences.
Digital Dabblers are often the heads of a larger household. They’re more price-sensitive, so they comparison shop and hunt for deals—and take more time to do it. While the convenience of online shopping is appealing to them when they need it most, they still like to go in-store for their produce and other perishables. They still go in-store for 86% of their shopping trips.
Digital Champs shop online at least once a week and roughly 70% of their trips are transacted online. Unlike the Digital Dabblers, they tend to be health-conscious rather than very price sensitive. Convenience is a big reason why they are comfortable shopping from home. Their comfort in leveraging e-commerce to purchase the breadth of categories across the grocery store also means they’ll create a larger online basket than the Dabblers.
How does a digital basket differ from a brick-and-mortar basket? Physical supermarkets fulfill a variety of shopping needs, from the main weekly trip to a quick run-in. Conversely, eight in 10 pick-up orders are stock-ups. As a result, digital baskets are consistently much larger than in-store carts, even among shoppers Digital Dabblers. While e-commerce is a much less common method to complete small trips, it does deliver unique benefits for urgent family essentials, like diapers, toilet paper and pet food.
In addition to the composition of digital baskets being different, analysis of our clickstream data also provides a new lens into the way trips are completed. By isolating the items likely to be added last, we uncovered a shift in online impulse purchasing.
Rather than adding items like candy, magazines and beverages last, as one may do in a physical checkout, digital shoppers are adding categories like alcohol, flowers and beauty last to their online order. This signals a shift in the impulse mindset of the online shopper from immediate consumption to delayed indulgence.
What do you see as the key omnichannel retail trend(s) for the next 12-18 months? Omnichannel shopping will continue to grow as more shoppers try out the expanded options now available to get their groceries. As they do, shoppers will also develop stronger preferences for when and why they leverage each method to fulfill different needs and deliver specific benefits.
However, the top trend that brands and retailers should monitor over the next year is the impact that inflation will have on omnichannel shopping. According to an 84.51° Real Time Insights study fielded in June, 73% of shoppers are highly concerned with inflation, and 90% claim to be changing behavior as a result. The top two behaviors are looking for sales, deals and coupons more often; and cutting back on non-essentials.
The first has the potential to drive some shoppers back in store, where it is easier for most to browse and comparison shop. However, the latter has the potential to encourage more online trips, where hybrid shoppers are already going avoid those impulse purchases not ‘on the list.’ Both are primed to create a high-stakes environment for brands to consistently win the trip with even their loyal shoppers.
Brands that monitor trends at the shopper level, in real time, across both in-store and online, will be armed with the intel required to more surgically design marketing and promotion plans that will deliver relevance and value to shoppers across all the full omnichannel ecosystem.