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Online channels are fueling almost 90% of growth in the US FMCG market, and new data from Nielsen [download page] indicates that 87% of online orders are completed via home delivery as opposed to in-store or curbside pick-up. Here are 3 takeaways from Nielsen’s report.

1. Health and Personal Care Lead the Way

Health and personal care products are the most widely purchased FMCG products online and also the most frequently purchased, per the study.

Fully 59% of shoppers surveyed by Nielsen report having ever purchased health products online, with personal care products close behind (57%). Household products (51%) are the only other FMCG category purchased by a majority of shoppers at some point.

In terms of purchase frequency, 44% had bought health products online within the prior 3 months, with personal care (42%) closely following again.

And looking ahead, health care (33%) leads in online purchase consideration by shoppers, followed by pet care (29%) and personal care (27%).

Interestingly, roughly one-third (32%) have bought groceries online, per the results, with more than one-fifth (22%) having done so within the prior 3 months.

Nielsen previously reported that e-commerce accounts for roughly 80% of grocery dollar sales increases.

Grocery e-commerce appears to be particularly popular among Millennials, adults living in the East of the US, and those in urban areas, according to Gallup survey data.

Meanwhile, meal kits have not yet been widely adopted: fewer than 1 in 10 (9%) profess to have ever purchased them online and just 5% had done so in the previous 3 months.

2. The Big Opportunity? Pet Food

One of the standout areas in FMCG e-commerce is pet food, with relatively low but fast-growing e-commerce penetration.

During the 52-week period ending in early August 2017, e-commerce represented 18.3% of dog food sales and 12.6% of cat food sales.

Where these areas really stand out are in growth figures: e-commerce dollar growth exceeded 90% for dog food, and surpassed 60% for cat food.

For context, the growth rate for in-store dog food is just 1%.

Notably, e-commerce growth is providing an opportunity to smaller, niche brands. While the top 20 dog food brands account for 82% share of in-store sales, they occupy just 42% share of e-commerce sales. Even so, these leading brands are seeing above-average e-commerce growth rates (114%), indicating that they have plenty of room to expand.

3. 20% of FMCG E-Commerce Orders Are Part of A Subscription Service

Subscription services have been earning some attention of late, as evidenced by growing interest in meal kits. And one-fifth of e-commerce orders are now made as part of a subscription, according to the study.

While meal kits have the highest rate of subscription orders for food items, they’re only fourth overall among FMCG categories.

Instead, non-food items (at least, non-human-food items) top the list in subscription rates: dry dog food; pet treats; and diapers & wipes.

Vitamins (#5) and men’s razors (#6) are also seeing strong rates of subscription orders, per the report.

The full study is available for download here.

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