PETS AND PAMPERING PROMPT NEW PEOPLE TO PURCHASE ONLINE
Online is the biggest avenue for growth in an otherwise stagnant grocery sector. Nielsen’s syndicated Grocery E-Commerce Report for the third quarter of 2018 reveals that online shopping continues to grow at an incredible pace, with a 39.7% lift in dollar sales for the year ending 6 October 2018 versus the previous year. In contrast, the Australian grocery market grew by just 2.7% over the same period. New households who purchased for the first time accounted for 21.6% of online growth; and with just 26.7% of the Australian population purchasing their shopping online, there is plenty of room to increase online sales further through the acquisition of new buyers.
Looking closer at the new online buyer, it’s evident that compared to the rest of the population, they are more likely to spend on health and beauty products and pet supplies online.
In the six months ending 6 October 2018, 14.6% of the new online shoppers’ spend was allocated to health and beauty products, compared to just 8.3% of the average online grocery buyers’ spend. These new online buyers spent an average of $41.09 on health and beauty items in the last 26 weeks, spending $26.69 per occasion and making 1.5 online purchase occasions.
For pet supplies, new online shoppers spent 12.0% of their online spend on the category, compared to just 6.8% of the average online grocery buyers’ spend. These new online buyers spent an average of $72.39 on pet supplies in the last 26 weeks, spending $45.01 per online occasion.
Consumers’ increasing propensity to shop for pet supplies online is not unique to Australia. Looking at sales trends in the U.S., Nielsen research shows that relative to the 5% growth across online and offline pet consumables, online sales of pet consumables increased 53% over the past year.
Attracting new buyers to the online channel represents a significant opportunity in Australia. By developing an online promotional strategy on big brands in health and beauty and pet supplies, retailers and brands can encourage new shoppers to trial purchasing online, and then extend their online purchasing into other categories over time.