Consumer Confidence Feeds E-Commerce Growth

While 2019 got off to a rocky start, with a partial government shutdown and trade challenges attributed to tariffs, consumers at the close of 2018 were buoyed by their strong household financial health and were spending accordingly. The latest IRI Consumer Connect survey results find that nearly 55% of consumers report their households were in good financial shape in Q4 2018, up 4% from Q3 2018 and 2% from Q4 2017. Hand-in-hand with consumer confidence is the growing and evolving e-commerce channel. In fact, 2018’s e-commerce sales increased a whopping 35.4%, according to IRI’s new research (Consumer Confidence Reflected in E-Commerce Growth).

Consumers are increasingly comfortable with online purchasing, and retailers of all stripes are upping their online offerings, working to enhance the shopper experience with simple navigation, assortment, good values and delivery options.

“Millennial and Gen X consumers are more at ease with online purchases than older generations, and as e-commerce becomes more of a routine, those shoppers are migrating offline efforts to save money to their online practices,” said Joan Driggs, vice president of content and thought leadership for IRI. “Online offers a lot of additional outlets for smart shopping, including easy comparison shopping and keyword search for more informed purchases.”

E-commerce sales for the latest 52 weeks ending Dec. 30, 2018, were $58.9 billion, a 35.4% increase from a year ago. These sales account for only 11% of total CPG retail sales; however, e-commerce accounts for 64% of total omni-channel growth.

Non-food items, particularly personal care and home care products, are tops in online purchases. IRI E-Market Insights reports that vitamins, pet food and supplies, and skin care products are the top-selling items.

Specifically, Q4 Consumer Connect survey respondents said buying online allows them to find lower-priced beauty and personal care product options—29% of total US consumers, 45% of millennials, 35% of Gen Xers, 27% of boomers and 14% of seniors. These results closely mirror thought on home care products, said IRI, with 30% of total consumers, 43% of Millennials, 36% of Gen Xers, 27% of Baby Boomers and 19% of seniors saying they find lower-priced options online.

More info: www.iriworldwide.com