There’s no denying that online grocery is rapidly growing, however what many may have overlooked is the major effect it is having on the frozen foods industry. As online grocery sales of frozen foods continue to grow, it will be increasingly important for frozen food brands to address this fast-growing channel.
While total market sales of frozen products climbed by only 0.8% last year, online sales soared 18%, according to a report published by Allied Market Research, Portland, Ore. In addition, Allied Market Research forecasts a compound annual growth rate of 4.1% for frozen foods for the period of 2015-2020.
According to our research based on purchases across our platform, the MyWebGrocer “Grocery eCommerce Index for Frozen” reveals there is a significant opportunity for frozen food brands to drive even more revenue online. The report found that not only are consumers buying frozen foods online, but they’re also spending more on these items online than they are in store:
● Almost 80% of all online carts included frozen products, making it the fourth most popular e-commerce grocery category.
● Sales of frozen products are purchased 13% more online than in-store (in terms of dollars spent).
● With an average basket value of $166, frozen food buyers spend 6% more than average consumers.
Despite these positive findings, there is still room for growth. Not only do frozen food brands have an opportunity to engage the 20% of shoppers who are not currently purchasing frozen foods online, but they can also motivate those who already are to buy even more.
To leverage this opportunity, brands should first look to work with retailers that have specific grocery e-commerce platforms with the capabilities to access consumer data and provide insight into how they shop for frozen foods. These retailers have access to unique data that can help boost online sales and engage with customers.
With this information, brands and retailers can work together to ensure that products are placed prominently on e-commerce sites and are used for cross-sell and upsell opportunities. In doing so, frozen food brands can affirm that their products are considered staples and find their way into more carts.
Secondly, it’s important for brands to work with retailers and e-commerce providers that allow them to join the conversation. Ninety eight percent of e-commerce shoppers are using search functions to gather product information before ordering groceries online, so frozen foods brands have an opportunity to ensure that their products are associated with relevant content on a retailer's site (recipes, tutorials or special offers) or within Google search results to drive additional sales.
Lastly, make sure to work with a retailer that offers a mobile commerce option. Across all food categories (frozen included), consumers using both mobile and desktop place 54% more orders. With more than 60% of Americans today owning a smartphone, mobile is ingrained into everyday American life and people expect to be able to do anything on mobile, providing brands with a significant opportunity to drive revenue via mobile. Work with a retailer that not only offers a mobile option, but also has a sophisticated platform that allows for a seamless experience when customers move from device to device.
The data shows that frozen foods are likely to see significant growth through digital channels in the years to come. But, for brands to maximize this potential, they must work with retailers and e-commerce providers that give brands access to customer data and allow them to have a say in both merchandising and other digital marketing efforts (such as search and mobile) to truly engage with shoppers and ultimately drive more long-term sales. Brands can take advantage of these efforts to round out the in-store efforts online, so they can reach customers wherever they are.