Where are online grocery shoppers going?

A new survey has some troubling data for digital grocery retailers.

According to first quarter 2023 analysis of more than 58 million shopper baskets of actual purchase data across the U.S. and Europe from SymphonyAI, more than half (52%) of e-commerce grocery shoppers left the online channel over the last year.

Further analysis of those lapsed customers reveals that while 60% are reverting to the retailer’s brick-and-mortar location, 40% have left that grocery retailer altogether.

While total online revenue growth only dipped by 1% in the first quarter of 2023 compared to the same quarter a year earlier, a result which SymphonyAI says is buffered in part by inflation, the study showed a 14% net decline in the total number of online shoppers.

The research also indicates that former online customers who did revert to a grocery retailer’s brick-and-mortar location had a reduction in overall spend by 16%, which SymphonyAI analysis suggests means they are also shopping for groceries elsewhere.

[Read more: Multiple factors drive down online grocery sales in May]

• Customers who formerly shopped only in-store and who subsequently became omnichannel shoppers delivered 15-18% in incremental sales over the last three years and purchase a basket size that is 9% higher than that of strictly in-store shoppers.
• More than eight in 10 in-store grocery shoppers have not used e-commerce for grocery shopping over the past five years.
• According to Symphony analysis, converting 5.5% of those in-store shoppers identified as top prospects into omnichannel users could lead to an additional 1% growth in grocery retailer revenue.
• SymphonyAI research also indicates that the number of households seeking private label products online deliver revenue growth of more than 10%, with 35% of households in the study buying private label grocery brands online.

The overall decline in online customers and their impact on e-commerce growth is significant,” said Laetitia Berthier, head of client engagement, SymphonyAI Retail CPG. “Contrary to expectations, the losses are coming not from shoppers who were forced online during the height of the pandemic, but rather those shoppers who had moved online after the pandemic. It’s critical for retailers to understand those customer dynamics and their fast-changing needs to succeed in the critical online channel.”

This study, conducted in the first quarter of 2023 by SymphonyAI Retail CPG, examined 58 million households and 607 million transactions across Europe and the U.S. Results were compared against the same period a year ago. All retailers in the study were given equal weight.