Single Source Data
Online vs offline brand loyalty from Single-Source data
22nd July 2022
In a previous post we showed that it is much harder to convert an online supermarket shopper to switch to a different online supermarket than it is to convert an offline shopper.
In today’s post we took a further deep dive into the difference in brand loyalty between offline and online supermarket shoppers.
The data shows that supermarket brand loyalty is stronger online than offline. While in the offline world consumers visit on average 2.54 different supermarket brands, this is reduced by 17% in the online world – to 2.11.
The largest difference is in people who visit only one supermarket brand – while in the offline world just 29% of consumers shop only in one brand, this increases to 44% in the online world (a 51% increase).
When looking at people who shop in 3 or more different supermarkets, we can see the exact opposite – 44% of the physical shoppers shop in more than 3 supermarkets, yet only 30% of online shoppers use more than 3 brands.
An interesting point is that we can see only 22% of online shoppers buy in the same supermarket brand as they buy offline, while 78% of online shoppers buy in a different supermarket. This means there is almost no brand loyalty when moving from offline to online.
This has huge implications for supermarkets. The most significant is around market share. There are a few components to this.
- In the offline world it is all about proximity – people’s preference of supermarket is based mainly on which supermarket is closest – this explains Tesco’s high market share as they also have the highest number of stores.
- In the online world the picture is very different as proximity has almost no meaning. Online shoppers are influenced by other factors such as price and the sites’ UX.
- According to McKinsey, online shopping is expected to grow over the next 8 years, between 40% in the conservative scenario to 250% in the aggressive scenario. This means that supermarkets must think about their online market share today as this market is up for grabs.
Taking this into consideration, it is not surprising that our data shows that the biggest winner from the move to online purchase is ASDA and the biggest loser is Tesco.
To summarise, we can see 4 main trends from our research:
- The share of online is going to grow substantially over the next few years.
- It is much easier to convert an offline shopper to buy online in a different supermarket.
- Once a user chooses an online supermarket, it is much harder to convert them to a different supermarket.
- Online shoppers are more brand loyal and use less supermarket
All of the above means that the new battleground for supermarkets is online and is happening NOW. Brands need to focus their efforts on getting online customers before their competitors get them or risk losing market share.
Does this mean that in a few years Tesco will lose its dominance to ASDA? Only time will tell but brands that do not act immediately, will see their market share plummet.
In order to do this, we looked at online and offline visits to 8 supermarkets: Tesco, ASDA, Sainsbury’s, Co-op, Aldi, Iceland, Waitrose and Morrisons. For this analysis we considered only visits to supermarkets that lasted longer than 5 minutes (both online and offline). The period of analysis wasJan-Jun 2022.
This research is based on online and offline visits to 8 supermarkets from a panel of 8,500 consumers who are passively monitored and provide ViewersLogic with Single-Source data – the measurement of TV and other media exposure, purchase behaviour and location data over time on the same individual.