Which Health, Food Segments Are Missing Out On The E-Commerce Boom?

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NielsenIQ – The pandemic has introduced over 22 million new U.S. shoppers to the online channel since March 2020, but growth in online sales hasn’t been equal across categories.

While overall growth has been strong among online sales of health, beauty, and food products, some segments within these broader categories have yet to gain e-commerce traction. Retailers now have the opportunity, however, to implement new tactics that will create a seamless customer experience and tap into the fast-growing e-commerce channel.

Immediacy drives in-store shoppers

In the last year, e-commerce has captured more than its fair share of dollars for many product categories, with most of those falling in the health and beauty care segment. In fact, 21 of the top 30 categories with the largest e-commerce dollar share were health and beauty products during the 52 weeks ended Dec. 26, 2020.

And while many of these products are soaring beyond their pre-pandemic e-commerce growth records, a handful of health and beauty categories remain predominantly driven by in-store sales growth.

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Which Health, Food Segments Are Missing Out On The E-Commerce Boom Brandspurng1

Despite the e-commerce lift spurred by pandemic purchasing, shoppers have made a little movement towards the online buying of categories like respiratory care, feminine care, oral hygiene, and deodorant.

According to NielsenIQ’s Omnichannel Shopping Fundamentals Survey, the top three barriers to the online entry for health and beauty products include a preference for shopping in-store, immediate needs for a given product, and longer-than-ideal delivery timeframes. In addition, survey respondents indicated a strong preference for shopping at mass merchandisers, grocery, and drug stores when purchasing the aforementioned products.

Online retailers have an opportunity to alter shoppers’ perceptions of what is the “most suitable” channel for everyday health and hygiene necessities. Less than 4% of brick and mortar shoppers surveyed considered online to be the most suitable channel to purchase the identified categories of respiratory care, feminine care, oral hygiene, and deodorant.

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There’s an opportunity to encourage more consumers to overcome perceived barriers to immediacy. By offering and heavily promoting the trial of subscription services, for example, retailers can fulfil shoppers’ needs in a highly convenient, timely, and loyalty-driven manner.

Quality barriers remain for online grocery

Digital grocery sales grew by 125%, bringing online’s share of total food and beverage sales to 12% during the 52 weeks ended Dec. 26, 2020. Despite this record growth, some online food categories are still almost entirely purchased in-store, with many of these products being perishable.

Of the top 30 categories with the highest in-store dollar share, 25 of these categories are food items, and there are key reasons why shoppers are sticking to their brick and mortar roots with many food purchases.

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Which Health, Food Segments Are Missing Out On The E-Commerce Boom Brandspurng1

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Revealing a compelling trend, scepticism around product quality discouraged 37% of consumers from buying frozen, fresh, and refrigerated foods products. This speaks to concerns of cold chain failures that could impact the eventual eating experience.

Another 46% of shoppers have been hesitant to purchase fresh, frozen, and refrigerated products due to their preference for selecting these items in-person. In these instances, consumer fears of product ripeness or potentially receiving a product nearing its expiration date, are coming to bear.

E-tailers can help alleviate quality concerns surrounding perishable products by promising prompt delivery timeframes while also ensuring that online pick-up and delivery orders offer an identical quality proposition to perishable products purchased in-store.

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Break down online barriers for fresh items like fruit, vegetables, and meat by incorporating capabilities into your online platform that enable shoppers to select foods based on attributes like ripeness and size. In addition, retailers can help shoppers further compare products online by profiling nutritional facts and ingredient information.

Recommendations for future growth

As the vaccine rollout progresses and shoppers feel more confident venturing to brick and mortar stores, some pandemic-related behavioural shifts will fade away, while some will have a lasting impact on consumption.

E-tailers need to ensure that they are providing solutions to widespread concerns such as immediate need, product quality and prompt delivery windows in order to break down barriers to online entry and further entrench consumers in their online habits.

Omnichannel shoppers expect their standards to be met in terms of price, convenience, and product availability, regardless of channel, meaning retailers need to ensure that they’re presenting an equal and seamless online and offline shopping experience.

This can be accomplished through identical online and offline product assortments and creating frictionless experiences for shoppers through home delivery, in-store pickup, or traditional brick and mortar shopping.

In addition, shoppers of all circumstances have been searching for the best deal as the future outlook remains uncertain. As such, offering the same promotions both in-store and online, in addition to price-match guarantees, will go a long way in retaining and attracting buyers in the long run.

As we progress into 2021, delivering a seamless customer experience, both online and offline, will be imperative to capturing growth as the omnichannel retail landscape further develops.

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