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Customers Not Coming Back for More Online Groceries

July 5, 2011Written by RetailWire Staff

Off or online, grocers face a perpetual struggle to keep customers coming back for more. However, research by Kingston University in the U.K. identified higher rates of attrition at supermarket websites than other types of retailers.

As researcher Dr. Chris Hand put it in a statement on Kingston University London's website, "When someone starts buying books or music online they don't normally stop and go back to bookshops or CD sellers. But that's exactly what is happening with many online grocery shoppers."

The first stage of their research used focus groups to discover the reasons for the adoption -- and discontinuation -- of online food shopping. Reasons for switching to the web included broken limbs, the arrival of children, moving to a new area where their favorite supermarket didn't have a store nearby or elderly parents becoming housebound.

"We found that these 'triggers' often led to just a temporary change in behavior," Dr. Dall'Olmo Riley said in the statement. "The adoption decision triggered by a specific situation is easily reversed when the situation changes again."

However, once that situation has reversed, many consumers go back to shopping in-store due to a disappointing online experience.

"Many respondents felt online grocery providers could not be trusted to be reliable because products were regularly omitted from their delivery and substitute items were often considered unsuitable," said Dr. Riley. "They also complained about late deliveries, bad picking and packing of goods and perishables being too near sell-by dates."

Their recommendations for retaining online shoppers included both improving service quality and finding ways to commit customers, possibly by offering subscriptions instead of delivery charges or making exclusive offers for online shopping.

American grocers have tried varying approaches, including home delivery (Peapod, FreshDirect, Meijer DoorstepGrocer, etc.), curbside pickup (Publix Curbside, Harris Teeter Express Lane, etc.) and a combination of delivery and pickup (ShopRite from Home, Hy-Vee, etc.).

In a RetailWire story and discussion on Peapod last October, Mark Price, managing partner, M Squared Group and a BrainTrust panelest said, "In order to succeed at the grocery delivery business, you need efficient logistics, a customer centered business model and philosophy, and the ability to stick with a market until consumers expand their adoption of the grocery delivery service. It is possible, that 'the ability to stick it out,' is the greatest success factor of all."

Results of various RetailWire polls on the subject of online grocery suggest opportunities exist, but that chances for success vary based on the retailer providing the service,

The Peapod-related poll found that 73 percent believed the potential for online grocery in the U.S. is medium or big. Respondents to a poll last year on the new Publix Curbside service found 40 percent seeing the potential for success as somewhat unlikely while 37 thought it somewhat likely.

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