Ecommerce is a cultural norm. Consumer concerns around quality, reliability and safety have long been assuaged by tech savvy direct-to-consumer startups and traditional retailers who look to stay relevant and competitive. Today, consumers expect fast, seamless delivery models to match their busy lifestyles and this doesn’t just apply to high priced electronics, clothing and furniture but lower priced impulse purchases likes snacks.
In this insight, we discuss how trends such as subscription boxes, automated ordering, click and collect and smart packaging are all contributing to new consumer behaviours around snacking. We talk specifically about how online retail is changing the nature of snacking, with supermarket-driven impulse snacking increasingly being replaced by snacking as an ‘occasion’ – driven by companies like Graze – and how online snack retailers are positioning themselves as experiential destinations. We also provide examples of the types of goods – including nuts, chocolate, and vegan options – that are proving popular among online consumers.
The growth of ecommerce over the past decade has had a dramatic impact on the retail industry. Research from the Food Marketing Institute and Nielsen finds the US online grocery market has doubled over the past year, with 49% of Americans now food shopping online. While perishable products, have taken longer to find a home in online commerce, we are starting to see demand grow rapidly. To support this trend, new packaging technologies and logistics infrastructures are catching up with the new demands of this paradigm.
The snacking category, which includes items such as crisps, nuts and confectionery, has long been dominated by major FMCG brands, who have mastered the art of impulse-driven sales. But thanks to new go-to-market models and changing consumer behaviours, the landscape is quickly shifting, creating opportunities for a new breed of snacking players to win consumer attention.
Cultural shift to digital
Ecommerce is a cultural norm. Consumer concerns around quality, reliability and safety have long been assuaged by tech savvy direct-to-consumer startups and traditional retailers who look to stay relevant and competitive. Today, consumers expect fast, seamless delivery models to match their busy lifestyles and this doesn’t just apply to high priced electronics, clothing and furniture but lower priced impulse purchases likes snacks.
Online is the fastest growing channel in the UK food and grocery market, currently accounting for £11.4 billion in value in a £190 billion market. This is expected to grow by more than 50% by 2023. Globally, Nielsen forecasts that 70% of consumers will do their grocery shopping online by 2024. Combine this with another major trend, snacking, and you have a perfect storm for change.
Online retail is changing the nature of snacking, with supermarket-driven impulse sales increasingly being replaced by snacking as an ‘occasion.’ Startups like Graze are “reimagining snacking” with healthy, colourful and convenient products that are proving popular among online consumers. Graze’s focus on personalisation, convenience and nutrition, combined with its ability to leverage tech and e-commerce expertise, has made it a leader in the snack-box delivery category.
New go-to-market models
This trend hasn’t escaped the attention of major brands, who are investing in technology and forging strategic partnerships to boost ecommerce offerings, optimise supply chains and reduce delivery times. Companies like Waitrose and Ocado have been pioneering this space in the UK, capitalising on advances in automated online ordering and smart home technology to offer superior levels of customer service.
Retailers understand the weight consumers place on ‘quick and easy’ and are adjusting their go-to-market models accordingly. Fulfilment orders, such as home delivery, click-and-collect (order online, pick up in-store), automatic refills and direct to consumer, are all more congruent with busy modern lifestyles than the need to visit physical stores and deal with frictions like parking, queues and heavy shopping bags. These methods also have further benefits, enabling retailers to inject more creativity into their delivery models and use email communications to build a deeper tie with the customer.
Changing behaviours
The shift to online has not come easily. Shoppers are used to buying snacks over the counter and have found the transition difficult. Evidence suggests that snacking is rarely a deliberate event, and as much as 70% of in-store snack purchases are unplanned. Historically, this has been a boon for supermarkets and other grocers, who have been able to capitalise on impulse through strategic product placement and heavy discounting.
The tides are turning, however, as consumers become more open to online grocery shopping. Research shows increased positive sentiment, even for frozen or refrigerated products. Further, there are signs that online snack ordering is changing, or at least aligning, with changes in brand loyalty, with online shoppers more likely to go beyond their usual snacking choices. Younger consumers in particular are typically less brand-loyal than their older counterparts, which means they often make decisions based on aesthetic considerations rather than brand history.
Parallel to this, packaging is opening doors for consumers to consume snacks in new ways and on their terms. The popularity of packaging formats such as PushPop, the ‘bag that becomes a bowl’ makes sharing more grown up and sophisticated. We also see solutions such as Amcor’s E-Close regarded as ‘best in class’ with an open/reclose system that’s integrated in the laminate and seals and reseals over and over keeping the freshness inside and the consumer in control.
These innovations are helping to support sharability and freshness and enabling brands to change the way consumers think about snacking, becoming more of a sociable treat rather than an ‘all-at-once’ guilty pleasure.
Advantage for smaller brands
The change in consumer behaviours has opened a new world of opportunity for nimble brands to nip at the heels of FMCG giants, who have lagged in ecommerce penetration on their own. Companies such as meal kit company HelloFresh and snacks brand Nudie show how smaller brands can use product quality and a focus on user experience to take advantage of ecommerce’s low entry barrier.
This has provided new momentum to brands that pride themselves on creating ethical and sustainable products. Removed from the noise of the supermarket shelves, these brands can build an online following composed of those who share their values. This trend is being reflected in the packaging aesthetic, with formats such as Amcor’s Charta, made with FSC certified paper, now commonly used to signify the brand’s commitment to its mission.
Moreover, smaller brands have benefitted from the rise of social media. According to GlobalData , 56% of global consumers regularly use social media sites or social media apps for sharing images and posts with friends. This level of penetration presents a huge opportunity for visually attractive savoury snack brands to increase visibility of their products, driven by use of social media and sharing of images with friends.
On the crest of a wave
The online snacking category is still an emerging trend. A late bloomer in the ecommerce landscape, it appears we are approaching a tipping point for online snack sales. Overcoming entrenched consumer habits is a long game but, if they do it right, then retailers can expect to see incremental growth online to ride the trend.
By capitalising on the features of online commerce – including colourful and creative ‘store fronts,’ social media and email engagement, and fast and convenient distribution models – brands can embrace new trends and put planned, repeat customers over one-time impulse sales.
For more information, Amcor
Marketing Director for Food, Amcor
