Q&A: The Online Shopping Journey

NielsenIQ VP Harvey Ma shares his thoughts on the online shopping journey before he speaks next month at P2PI LIVE in Chicago.
Tim Binder
Executive Editor
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NielsenIQ's Harvey Ma

On Oct. 18 at P2PI LIVE, NielsenIQ’s Harvey Ma will present a session titled, “Levers in the Online Shopping Journey: What to Expect in 2023.” He will explain how a keen understanding of the online shopping journey is now imperative to achieve profitable growth.

We recently sat down with Ma to discuss the online shopping journey and the opportunities it provides. For a full description of his P2PI LIVE session and to see the full agenda, visit the event website.

P2PI: How does understanding the shopper journey inform retail strategy for brands?

Ma: Especially in this era of omnichannel shopping, it is absolutely essential to get an accurate look at how shoppers buy your products online, whether it's for in-store or curbside pickup, or having products shipped and delivered to their homes. Understanding these behaviors, and quantifying them with accurate data, can inform how brands should promote products, and how they should meet consumers where they are buying your brand across channels. 

All consumer goods brands should be using data to inform every aspect of their omnichannel strategy. Data can help them spot different behaviors between different shoppers to inform strategy. Data can also inform stock levels — as retailers use brick-and-mortar storefronts more and more to fulfill online orders, and omnichannel data pinpoints differences in buying behavior by store and by region. Data can show how competitor brands are performing both online and in-store; it can inform packaging sizes and how you promote specific SKUs. And, lastly, the data keeps up with a continually evolving shopper. 

Omnichannel shopping patterns continually change, so data plays a much bigger role than ever before. Historical models and approaches that focus on how consumers shop the brick-and-mortar location are obsolete.

P2PI: Why is it important to understand the online shopping journey?

Ma: The physical store is the hub. It’s where most people buy products, but it’s also fulfilling a majority of online orders. Target reported that more than 95% of its sales in 2021 were fulfilled by its stores, and said that the company’s digital sales grew nearly $13 billion from 2019 to 2021. NielsenIQ data found that online sales have grown five times faster than in-store sales this year compared to last year. The data looked at baby care, pet care, household care, health and beauty and food departments, amassing $185 billion or 16% of the market compared to store sales representing 84% of the market. Online is a huge growth area, even if the store remains the primary way to get goods. 

But, most importantly, brands need to understand the online journey and the in-store journey, and how they work together. Are they looking at reviews? Are they reading digital labels on product pages? What information aren’t they getting online that they’re getting in-store on packages and displays? The online and in-store journeys should feel connected.

Converting omnichannel shoppers only works when understanding both the online journey, the in-store journey, and how shoppers fuse them together.


P2PI: How is the online journey different from the in-store journey?

Ma: There are some obvious differences. For one, when shopping in-store, the full product assortment is right before your eyes, whereas online a shopper needs to search or rely on how products perform in search rankings and through online recommendations. In-store shopping has displays, shelf signage, various promotional efforts including reaching shoppers via mobile phones to engage digitally and inform, and, most importantly, the physical interaction with packaging. That can be a factor online when it’s tougher to understand the size of a package and product, such as accidentally buying 50 ounces when only looking for 4 ounces. Online has more in-depth product pages and reviews that brands can leverage, too. 

But, beyond those basic differences, what is important to understand is how the online and in-store journeys are connected and blended in a new way now. For instance, some consumers like to research products online first, and then make a purchase either online or in-store. More than a third of conscious consumers go online to find how products are sourced before buying, per NielsenIQ data. Other shoppers look up sustainability practices or product attributes that are important to them, using online as a research tool. 

For example, consumers with certain dietary needs are doing more label gazing online to ensure items fit their needs. We’re seeing this a lot with conscious consumers and brands that can leverage data to track product attribution performance. These brands are identifying trends in online and offline shopping behavior and targeting shoppers with specific dietary needs or those looking for clean, organic, and eco-friendly products. We released a study recently touching on how to meet these shoppers in an omnichannel environment.

The online journey is also evolving and impacting the in-store journey in new ways. For example, NielsenIQ identified eight widely accepted shopper missions over the years by consumers: stock up trips, top off trips, an immediate stop for food and drink, meal prep, a trip for an item that someone needs right then and there that’s not at home, shopping because of a promotion, fueling up, and buying for a special occasion. With the increase of omnichannel shopping, we’re also seeing a new pattern emerge: click, collect, complete. More shoppers are preparing orders for in-store pickup and then finishing a shopping trip in the store. Our research shows that as of 2021, about 25% of U.S. and 19% of Canadian customers use the “click, collect, complete” method of grocery shopping, and more than 6 in 10 in the U.S. are open to the method.

P2PI: Where are the opportunities for growth with online shopping?

Ma: Alcohol is an interesting growth opportunity online. The increase in online shopping during the pandemic forced states to loosen regulations around online buying of alcohol and platforms like Instacart and grocers were reaching more shoppers online with alcohol. 

But the reality is that every category and every brand has opportunity to drive growth in online sales. Where once certain types of foods or products were strongly preferred by consumers to purchase in-store, consumers today are largely more flexible and willing to shop across channels to get the product attributes that are important to them, to support a brand they love, and of course to get a good price. 

Every brand has the opportunity to grow their online sales by optimizing their digital shelf. They need to utilize the right verbiage and recognize the right attributes in product descriptions to deliver a high search ranking result, and they need to rely on platforms and insights to ensure products are in stock at every store and are visibly in-stock online across online storefronts. These are key factors to help brands capitalize on online shopping growth.

P2PI: Why is it important to understand impulse purchase drivers with online shopping?

Ma: Just as it’s been important to drive impulse buys inside stores for decades, brands can leverage several tactics to drive impulse purchases online. Brands can offer adjacent products while shoppers search certain items. They can present new flavors and innovations to shoppers. Retailers can present customized online shopping experiences based on loyalty behavior and online shopping lists that can make impulse shopping feel personal. 

The true strength is in the data and domain knowledge that understands the online shopping journey, making impulse buys feel intentional rather than just looking to entice a shopper in-store through displays and marketing. In the omnichannel shopping environment, digital messaging can be directed to shoppers inside a store to push an impulse buy or while shoppers are browsing online. 

It’s also important to note that impulse purchase drivers and promotions helps move stock, too. Online retail media advertising triggers most online purchases and this type of advertising has increased substantially over the past few years. However, the advertising is worthless if an ad is pushing a consumer to a product that isn’t available. 

For example, through our partnership with Data Impact, we’re helping brands manage the digital shelf. A recent chocolate brand ran an online campaign and found an out-of-stock rate of more than 10% at 353 online stores. Data Impact, powered by NielsenIQ’s location-based analytics, can track out of stocks and distribution from every online store. E-commerce algorithms de-prioritize products that are low in inventory, which can trigger lower search rankings and less product visibility online. This leads to lower sales and lower replenishment by the retailer.

Understanding the shopper journey online is now critical for brands of any size, and that includes what drives impulse purchases, and how to stay in stock for retailer partners.