Consumers flocked to online grocery shopping during the pandemic, but large numbers say they miss making the impulse buys that are a staple of the physical store experience. The industry misses them too: Impulse sales account for 20% of in-store purchases. Here's how retailers can implement integrated intelligent search to provide a more immersive “in-silico” shopping experience — and boost basket size.
Grocery stores are traditionally big beneficiaries of consumers’ love of spontaneous purchases. Before the pandemic, consumers made three impulse buys a week, and 70% identified food as the main category. The restrictions of COVID-19 have elevated the feel-good aspect of impulse buying even higher: 72% of respondents say the purchases lifted their spirits, according to a survey conducted in April during the global shutdown. There’s a reason they call it retail therapy.
For all its advantages, online grocery shopping lacks the opportunity for the impulse buys that fill shoppers’ carts — and the grocery industry’s bottom line. Sixty-two percent of consumers say they miss discovering items that weren’t on their list. On most sites, grocery search remains an inexact science. Recommendations at check-out or from other shoppers often miss the mark.
How can grocers innovate the online experience so shoppers can not only find what they want easily but also still make impulse buys?
The answer is integrated intelligent search. It converges the critical building blocks of product, consumer and personal data on a platform and then serves up individualized content while managing security and compliance. The platform brings together image and content analytics; cognitive search; data modernization and e-commerce technologies to replicate spontaneous in-store experiences and will also power the growing commercialization of augmented reality.
The global pandemic has shaped a new consumerism that underscores the importance of more innovative search. Online grocery shopping surged 237% through August 2020, and inclement weather during the coming winter months could propel the numbers even higher. In-store orders per month are already down 11%. Even with an impending vaccine, the trend is expected to continue: Eighty-one percent of consumers say they plan to continue buying groceries online after the pandemic.
What’s more, the number of shoppers with dietary restrictions is growing. In the U.S., 190 million have severe food allergies or health issues such as high blood pressure, cholesterol and diabetes that affect their diets. Integrated intelligent search is critical to the transparency and real-time insights this expanding population needs.
Enabling a spontaneous, immersive online grocery experiences through integrated intelligent search has four prerequisites:
With an average of 28,112 items in the typical supermarket, curating accurate product data — including image, ingredients and GDSN attributes — is important to enable both intelligent search and impulse buying. For example, we worked with a multibillion-dollar grocer that reported a 30% increase in quality and search score by enriching and automating its product content. Our team oversaw the transformation of the grocer’s content operations, where we enriched the taxonomy by adding product specifications and attributes, product hierarchy and style guides. We enriched 45 million attributes, many through machine learning. In addition to improved search, the company reported a 27% increase in page views, 25% boost in add to cart and 13% reduction in returns.
Consumer data is a building block for integrated intelligent search. Many retailers are already looking to drive top-line growth by putting consumer data to better use for real-time insights and customer profiling to improve merchandising, allocation and planning, and forecasting. It’s a push that has a big payoff. When a global convenience store retailer took steps to measure, analyze and track customer data, and then dig deeper for insights to craft more relevant offers, it reported that sales of top-selling basket items increased by 25% — even during COVID-19. Our team partnered with the chain to develop an accurate view of consumer purchases and then to identify critical risk customer segments. We also measured omnichannel sales performance, determined the most valuable customers and enabled hyper-personalization. The convenience store gained a host of business outcomes. Its demand forecasting became more accurate, and it developed new insights into supply chain traceability and prioritized its order fulfillment services. It reportedly saved 40% in annual operating and licensing costs. Time spent on compliance was said to plummet 30%.
Knowing shoppers’ likes and dislikes is at the heart of integrated intelligence search, yet the proliferation of data protection laws such as GDPR and CCPA has reshaped how retailers treat consumer data. The laws require companies to serve as data stewards and the levy strict fines for non-compliance. Data has to be accessible and securely protected. When a multibillion-dollar global consumer goods company needed a way for customers to store personal and protected data, we built a secure, compliant platform. The platform houses customer details — including skin type, allergies and other skin sensitivities — that are considered personal protected information (PPI) or sensitive personal information (SPI). As a result of the platform, the brand’s customers now receive highly personalized offers, and our client wins by driving larger basket size.
The surge in online food shopping is a mandate for grocers to create next-generation platforms that enable spontaneity and impulse buys in an immersive “in silico” experience.
Platforms play a key role in bringing creative content and deeply personal offers to shoppers at select moments during the customer journey. How the information is shared, and the absolute fit for each shopper, influences shoppers’ perception of offers as value rather than clutter, and ultimately leads to large basket sizes. For example, by implementing personalized marketing and content for dozens of brands, a global retailer and consumer products firm reportedly boosted its conversion rate by 32% and increased customer engagement 20%. Our team’s full range of marketing and creative content services included implementation and management of their marketing and ecommerce platforms.
Given impulse buys’ value to grocery store revenues, the business case for bringing more product discovery to the online experience is significant. Based on an August survey that estimated 59.5 million online grocery orders for the month, and an average order value of $95, the additional upside to top-line revenue to the grocery industry might be as much as $560 million a month or $6 billion annually.
Grocers that embrace this challenge and create a single immersive platform that converges product, consumer and personal data will better engage customers with connected, personalized experiences that pay dividends.