What's in Your Basket?: Why eGrocery is Becoming Sephora's Competitor

Believe it or not, health, beauty, and wellness products are the second-most purchased category when people shop for groceries online. It turns out that after consumers are done adding avocados and quinoa to their baskets, they figure it’s as good a time as any to throw some skincare products in there alongside them.

So if you’re a beauty or personal care brand and you are not investing in non-traditional retailers, you are missing out on the huge opportunity that is online grocery. 

What’s Being Added to Cart During Check Out?

When you're in line in the grocery store, what's in your basket? Is it just food and beverage items? Chances are when visiting stories like Target, Walmart, Albertsons, and Whole Foods, food and beverages aren't the only things in your cart. Beauty and personal care products are there, too. 

MikMak has discovered that this is true for eCommerce too. Sure, maybe you got to Target because you decided to add Cheez-Its to your cart, but at check out, you decide to stock up on your favorite lotions, eyeliners, and foundation, too. You're already about to make a purchase anyway, and will have to pay for shipping. So what's several items more?

For the last several years, Sephora faced the strongest competition from retailers like Macy’s and Ulta. However, that’s all changed since the pandemic thanks to the rise of eGrocery. As more and more consumers get comfortable buying groceries online, beauty and personal care brands may be surprised to find that their products are popular not just at traditional retailers like Sephora but increasingly also at grocery retailers like Amazon Fresh, Instacart, Kroger, Peapod, Walmart Grocery, etc.

Indeed, online grocery shopping exploded in 2020—to the tune of a staggering 627 percent increase. At the same time, purchase intent for online grocery grew from 3 percent to 14 percent, a tremendous uptick. This trend is only going to continue this year.

Knowing that check-out line consumer behavior at brick-and-mortar grocery stores also occur in eCommerce settings opens up the door to new growth for beauty brands. Here are some ways beauty brands can take advantage of this insight:

1. Taking advantage of the eGrocery momentum

In 2020, household penetration of eGrocery grew to 25 percent, up 5 percent from the year prior. As shoppers are more comfortable with buying online, more retailers and brands are also doing everything they can to make the online buying experience as seamless as possible. Grocery stores are rapidly catching up in their eCommerce adoption. In June 2020 alone, grocers generated a whopping $7.2 billion online. Since consumers are adding beauty products to their grocery orders, beauty brands should be taking note of this momentum of growth—their products have a share in it.

2. Finding your product adjacencies 

Compared to many other categories, eGrocery is still relatively new, and there’s much to be excited about. For starters, online orders have increased both in basket size and basket value, with current average online orders now at $70. Of this final purchase, MikMak has found that nearly 15% of products at check out fall under health, beauty, and wellness. 

With average basket size currently clocking in at 6.81 items, it’s clear that consumers who are buying groceries online are already hardwired to buy several products instead of one or two. All of a sudden, adding some hand cream to your cart becomes more akin to muscle memory. But which food and beverage items are your products added to cart with? What can you do in your marketing tactics and awareness campaigns to further the association of your product with these adjacencies? How do you ensure that it's your product, and not your competitor’s products, that are added to cart and purchased?

(Hint: You’re going to need data.) 

3. Leveraging increased opportunities of purchase consideration

Did you know that consumers buy grocery products 6.4x more times per year than they buy beauty products? That means in a brick and mortar setting, consumers encounter personal care and beauty products and consider purchasing them while they are picking up groceries. But that doesn’t mean this isn’t happening with online shopping as well. In eGrocery, your consumers can also have up to 6.4x times more opportunities to add your product to their cart at checkout. 

What impact can 6.4x more opportunities to purchase your product do for your bottom line? What about your market share? How does that affect your campaigns and retargeting strategies? 

Ready to make your move on eGrocery?

As you develop your plans for 2021 and beyond, eGrocery represents an excellent opportunity for beauty and personal care brands to consider when driving growth. 

By making a big bet on eGrocery, you can tap into evolving consumer preferences and sell more of your products online. Here are some eCommerce basics first  to make it happen:

• Adopt an eCommerce-first mindset: Modernize your strategy by understanding that the consumer is now going to be shopping online more frequently than they shop at traditional retail outlets. Enable them to shop online for whatever of your products they want at any retailer, and you’ll ship more units. 
• Collect first-party data: By collecting data directly, you can gain valuable insights about consumer behaviors and preferences. Don’t only depend on third party data to make your strategic decisions.
• Use data to make real-time optimizations: The easiest way to do that is by leveraging an eCommerce platform that brings all of the retailer insights you need to one central location.