The online grocery industry has proven to be one of the more difficult for retailers to conquer, both in the US and Europe.
With the explosion of social media and new technologies, consumers are empowered to research and share their opinion on products and brands like never before. Combined with the increase in competition, changing consumer behaviour, and a volatile economy, growing grocery sales online is both a major challenge and an opportunity for supermarkets.
Online grocery is actually one of the few areas where the UK leads the traditionally more pioneering US, with online sales currently representing 5 percent of total sales, in comparison to 1.9 percent in the US. However, these figures are expected to increase substantially in the next five years, as companies make shopping for food online more convenient and accessible than ever before.
Convenience is the number one reason why consumers shop online for groceries. The extensive choice available in supermarkets can be both overwhelming and time-consuming to navigate, making the ability to quickly filter down the vast array of products and brands online an attractive alternative. Additionally, changes in society like women’s increased purchasing power, represent a great opportunity for retailers to invest in solutions enabling them to provide a more convenient, ideally frictionless, shopping experience, both online and in-store
The desire for a quick and pain-free experience means the consumer decision journey is quite different in comparison to other purchases, and that contrast is reflected in how consumers engage with grocery websites. According to a variety of brands and retailers in the Bazaarvoice network, only one to 10 percent of total site visits access a product detail page – a very low number when you consider the online retail average is 35 percent.
For Bazaarvoice and our clients, it is important to understand how consumer-generated content (CGC) can impact different grocery shoppers according to their requirements.
The minority segment of customers who do access products pages are generally looking for more information about the product before adding it to their basket. Often this happens when consumers are:
- Experimenting with a different brand of a product they buy regularly
- Considering a type of product they have not purchased before
Ratings & Reviews lead to this discovery and allow customers to hear from other shoppers about their experience with a product prior to purchase. In the instance of low-consideration purchases, this content helps consumers determine if the value brand is worth it. The opposite holds true with luxury products, as consumer-generated content may help justify the cost of high-consideration items like automobiles or appliances.
White label and lesser known brands do not have the marketing budget or brand equity of established brands; this increases the significance of social validation to gain trust in these brands and their products. Once a customer has tried and tested a product, it is more likely to be added to their favourites and reordered, increasing the lifetime value of that customer.
Bazaarvoice industry benchmarks reflect that this segment of users are highly influenced by CGC – 45 percent read reviews and they have an uplift of conversion of 113 percent, in comparison to those who did not read reviews. This can increase revenue per visit by 84 percent.
This research behaviour is not just limited to online shopping either. Thirty-five percent of grocery page views are accessed on mobile devices, suggesting some customers are doing research whilst in store. This trend of researching online and purchasing offline, is further detailed in our recent ROBO study.
Why volume matters
The majority of products on grocery websites are added to the checkout from category or search pages, providing another opportunity to display CGC. Displaying the star rating and volume of reviews below each product gives a quick and strong indication of the quality and popularity of the product.
As with any product or service, the volume of reviews is very important in influencing conversion. In an 18-month study with a Mass Merchant retailer, Bazaarvoice measured the impact of reviews on 300 fast-moving consumer goods products with an average price of $4.77. Increasing the number from 0-20 reviews increased the number of units sold by 67 percent.
Mass merchant retailers sell thousands of different products, making it difficult to generate fresh CGC on every product. To help retailers with this challenge, Bazaarvoice connects them with brands, allowing them to share brand review content at the point of purchase.
Beyond the product page
Online conversion is frequently the main benefit of a successful CGC programme, however for many Bazaarvoice clients this is just the starting point. There is measurable value from using this strategic asset across multiple channels and customer touchpoints, where shoppers are looking for social validation.
Waitrose created their “Loved by you” campaign, a multi-channel marketing campaign that showcases customer’s top reviewed products. This has not only been promoted online, through the website and email, but also offline, with special in-store displays and within the pages of the Waitrose magazine.
Marked.no is a new entrant to the Norwegian grocery market. They are using customer reviews on their recipes to help inspire shoppers to try new food. Once customers have found a recipe they would like to try, they can very quickly add all of the ingredients to their shopping basket.
CGC is also a powerful tool to use internally too. Sainsbury’s monitors the product insights, which are included within customer reviews, to see where improvements can be made. When it is clear a recipe is not popular with customers, the company can participate in the conversation and communicate changes in an open and transparent manner.
To find out more how Bazaarvoice clients are making the most of CGC across different industries, including food and beverage, take a look at our CGC Index report illustrating best-in-class performance benchmarks from a diverse base of over 2,000 Bazaarvoice brand and retailer client sites across the globe.