‘A whole new world of retail’: NIQ reveals the evolution of omnichannel shopping

“The reality is that this is a whole new world of retail. The traditional models we have thought about for a long time – and the way we have always operated – are simply transforming into new technologies and new forms of shopping that consumers are adopting. So channel concepts are evolving to focus almost exclusively on consumers. The traditional concept of what brands are and what is important about them has also evolved significantly and is much more attribute-based,” Juskowiak said.

“Online shopping is a much more fragmented space for consumers.”

Encouraged by Covid-19-related habits, consumers are now shopping in more channels than ever before, Juskowiak explained.

According to NIQ Omnishopper data for the 52 weeks ending January 27, consumers shop on average across eight different channels and using an omnichannel approach that includes a mix of physical and online stores.

According to the same NIQ data, the majority of consumers (70.6%) shop for groceries using an omnichannel approach, while 29.3% of consumers shop exclusively in stores and 0.1% exclusively online. According to NIQ, omnichannel commerce customers spend 16.1% of their share of wallet online, up 1.1 percentage points over the same 52-week period.

According to NIQ 2024 Consumer Outlook data, the majority of consumers (85%) order from an online-only retailer for home delivery, and an equal number use a combination of physical store and online options. Additionally, 69% of consumers order delivery from a supermarket or bulk store, and 64% of shoppers order online and collect in store – also known as click and collect.

Despite the increase in omnichannel shopping options, including ordering online and pickup in store, customers are now purchasing less food through direct-to-consumer (DTC) channels than they were a year ago. DTC food sales accounted for 3.3% of market share in 2023, up from 4.9% in 2022, according to NIQ e-commerce data.

“We know that online shopping is a much more fragmented space for consumers to enter. So not only the platforms on which they make purchasing decisions are changing, but also the places where these decisions are made are changing dramatically,” Juskowiak said.

Will TikTok be the next big e-commerce platform?

According to NIQ 2024 Consumer Data, consumers are increasingly shopping directly on social media platforms such as TikTok, with 55% of purchases coming directly from social media or live streaming platforms.

“We’ve seen TikTok grow from no social commerce platform to… 30th place in the food retail market over the last seven months and growing. (…) It’s a completely new way of shopping that creates completely new mechanisms for consumers both exploration and discovery of new products,” said Juśkowiak.

Influencer and celebrity brands like Mr. Beast’s Feastables and Logan Paul’s PRIME are using their digital presence on TikTok to grow their businesses by taking share from existing brands, Juskowiak explained. In 2023, Feastables increased dollar sales by 750% and PRIME by 700% compared to 2022 data, according to NIQ Omnisales data.

“They win first on their marketing platform, brand, identity and personality, connecting to an overarching lifestyle… and then turning that into product performance at retail. It’s a completely different way to go to market and offers many more opportunities to make a difference. It also changes the way consumers should think and interact with brands, and potentially changes their expectations of brands and how retailers expect brands to perform,” Juskowiak said.

“Brands alone are not enough” to win in omnichannel

As consumers shop more often online, brands can no longer rely on brand loyalty to make consumers’ money and must meet their needs at a reasonable price, Juskowiak explained.

“(Consumers) are not looking for brands. Instead, they look for the right benefits, attributes and things they need to meet the needs that exist in their household,” Juśkowiak said.

Additionally, budget-conscious consumers look to promotions to save money – according to NIQ data, more than a quarter of dollar sales (26.1%) are attributable to promotions, and 71.5% of dollar growth is attributable to promotions.

“Brands on their own are not enough because people don’t think in terms of brands. It’s not enough that they know your brand, but they can’t find you. You have to be findable. But at the same time, you have to deliver based on the right price points and the right value propositions for the deal to happen,” Juskowiak said.