dunnhumby Consumer Trends Tracker

Introduction

April 2022 saw the launch of dunnhumby’s Consumer Trends Tracker (CTT). As a quarterly piece of primary research, it is designed to uncover shoppers’ needs, perceptions and behaviors over time, to complement dunnhumby’s Retailer Preference Index (RPI) which measures the strength of retailers’ customer value propositions. The CTT focuses on nine primary trends, listed below, with the potential to incorporate custom questions to stay ahead of the latest trends:

  1. Private brand
  2. Pricing
  3. Store experience/format
  4. eCommerce
  5. Assortment/category/variety
  6. Health and sustainability
  7. Promotions/loyalty program
  8. Supply chain
  9. Competitive cross-shop

This month’s Consumer Trends Tracker, brought to you by the Customer Strategy and Insights (CS&I) team, focusses on eCommerce, and so the remainder of this article will introduce customer insights relating to eCommerce. The sample per wave is 2,000 nationally representative shoppers, and over time we will focus more on trending the data.

April 2022 saw the launch of dunnhumby’s Consumer Trends Tracker (CTT)

Executive Summary

  • The online grocery shopping experience touches 45% of customers, the vast majority of which are omnichannel shoppers.

  • Online/Omnichannel shoppers spend more on groceries than in-store only shoppers, but they also spread their dollars between a greater number of retailers (between 3.9 and 6.6 monthly, vs. 3.2 for in-store only). This could lead a false sense of shopper loyalty, if retailers only consider the dollars spent at their store.

  • Online shoppers are 6% more likely to have skipped/cut the size of a meal for financial reasons and 10% more likely to have difficulty covering an unexpected expense. Retailers should be cautious assuming online shoppers are less price sensitive. Average incomes are higher, but so too are spending pressures, as a result of larger average households.
  • Mass, Convenience and Drug stores are the channels with the highest relative eComm penetration (excluding Pureplay). Dollar stores and Discounters have the lowest.

  • Online skews towards non-food missions, and the categories most shopped online reflect the needs of the shopper profile as predominately young families

  • The price-to-quality expectation of categories is not always the same online as in-store. Customers look for higher quality Alcohol, Pet Care and Soft Goods online.

  • The influence of eCommerce extends beyond just purchase, with in-store shoppers using retailer apps and showing interest in new delivery channels.

SECTION 1

Why we should we pay attention to eComm?

SECTION 2

A note on loyalty

SECTION 3

Are eComm shoppers less price sensitive?

SECTION 4

Channel View

SECTION 5

Mission & Category View

SECTION 6

The Wider Influence of eCommerce

SECTION 1

Why we should pay attention to eComm?

The online grocery shopping experience touches 45% of customers. The vast majority of these are omnichannel customers, shopping online as well as in-store. Their monthly average grocery spend is significantly higher than in-store only customers ($594 vs. $388), reinforcing the value of this customer segment.

SECTION 2

A note on loyalty

As a retailer looking at just spend and visits at their store, it may appear that the omnichannel shopper is a more loyal shopper. The reality is that whilst they spend more on groceries, they also shop at more retailers on average (estimated range: 3.9 to 6.6 a month across all channels). Conversely, in-store only customers shop an average of 3.2 retailers a month. Through this lens, we see that in-store shoppers may be more loyal customers, and that omnichannel shoppers are potentially harder to pin down, buying where and when it’s convenient for their busy lives.

SECTION 3

Are eCommerce shoppers less price sensitive?

The conventional belief is that online shoppers are wealthier and so are more forgiving of the additional fees (delivery, etc.) associated with online shopping. Indeed, dunnhumby’s latest eCommerce RPI finds no relation between the price pillar and a retailer’s online performance. But does this mean online shoppers are less price sensitive, or simply that price falls further down the hierarchy of needs? Data from dunnhumby’s Customer Trends Tracker suggests the latter...

SECTION 4

Channel View

The Consumer Trends Tracker includes nearly 90 individual retailers, which have been allocated into 9 channels for the purpose of reporting trends. This shows the % of shoppers that have engaged with each channel, either in-store or online. The channels with the highest relative eCommerce penetration are Mass, Convenience and Drug stores. The channels with the lowest are Dollar stores and Discounters.

SECTION 5

Mission & Category View

So what types of shopping trips do customers take online? The charts included show that while in-store is still the dominant channel for all missions, the proportions do differ. Non-food focused trips are the least common in-store, but the most common online (large and small baskets). Currently, eCommerce caters less well for the On-the-go trip and this is reflected as the least common mission online.

SECTION 6

The Wider Influence of eCommerce

eCommerce is constantly evolving and as a greater proportion of the population adopts technology, so its influence grows beyond just purchase. Almost 1 in 5 current in-store only shoppers interact with a store’s app. They use it predominately to browse the weekly ad/circular, check their rewards/points/coupons available, and plan their shop/shopping list. Just as apps are becoming more seamlessly integrated into our lives, so too are new routes to potential customers through channels such as quick commerce. Grocery delivery in under 30 minutes is a popular concept among existing online shoppers, but interestingly also appeals to 1 in 4 of our sample who currently only shop in-store. It seems that if online grocery retail can remove some of the major hurdles that exist today e.g. delivery wait times, its influence is only set to expand.

Closing note

This article provides top-line context to the eCommerce shopper and how they interact with different channels. As we collect future waves of data, customer insights will be trended over time, not just relating to eCommerce, but for all nine areas mentioned in the introduction. Next quarter’s feature article will be on another ever-pressing topic. Stay tuned!

1Food security question replicated from the USDA’s Food Security Survey (AD1) and asked within dunnhumby’s Consumer Trends Tracker

2Unexpected expense question replicated from the Federal Reserve’s Survey of Household Economics and Decisionmaking (SHED) and asked within dunnhumby’s Consumer Trends Tracker