Nielsen: The Next Digital Grocery Frontier

The grocery business industry truly is at the tipping point of great change. More than driverless vehicles or delivery drones, the digitally engaged food shopper will fundamentally transform how food is bought and sold. With this shift, retailers and fast-moving consumer goods (FMCG) manufacturers will be required to reinvent their strategies and their operating models, from the ground up.

At this year’s FMI Midwinter Executive Conference in Scottsdale, Ariz., Nielsen and the Food Marketing Institute (FMI) revealed initial findings from its Digitally Engaged Food Shopper study. Building on a strategic multi-year partnership announced last year, Nielsen and FMI’s research estimates that in the current climate of technology adoption and evolution among consumers, spending on online grocery food and beverage shopping could reach $100 billion in the next decade.

In a panel discussion at the conference, Chris Morley, president of U.S. Buy, Nielsen (No. 41 on the DiversityInc Top 50 Companies list), and Thom Blischok, global retail strategic adviser to Nielsen, outlined for key decision-makers in the FMCG and retail industries what will it take to win with today’s connected consumers. Morley and Blischok highlighted the effect that digital will have on the grocery industry over the next 10 years, focusing on digital purchasing behaviors, the road map for center store, industry readiness for digital food shoppers and how retailers and manufacturers can better collaborate in an open ecosystem. They also highlighted how today’s food shoppers have transitioned to a new norm; the use of digital technologies is reshaping the retail landscape and will do so for the foreseeable future. However, many retailers are still working to build a clear path for success with digitally engaged shoppers.

Grounded in Nielsen data, insights from the Digitally Engaged Food Shopper study will help food retailers and FMCG manufacturers assess their current business model and build clear, strategic paths forward in the digital grocery frontier:

  1. Multi-channel shopping: More shoppers are buying more of their groceries across channels.
  2. Digital experimentation: Grocery retailers and manufacturers are meaningfully experimenting with business models and technologies to find their way online. However, the road to success has not been paved.
  3. Grocery saturation: Grocery shopping will reach digital maturity and saturation faster than other industries, such as publishing or banking.
  4. Center store migration: Center store categories are already migrating online, and we expect this migration to continue.
  5. Young and digital: Younger, newer and more engaged digital shoppers adopt grocery-related digital technologies more quickly and will hasten the expansion of digital grocery shopping further.

As part of this multi-year initiative, Nielsen and FMI will continue to dig deeper on the next digital frontier of grocery and will release subsequent findings in the future.

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