Abstract
Overview
Introduction
The online grocery market is experiencing rapid growth due to growing Internet
penetration, entry of new players, and the realization amongst time-pressured
consumers of the convenience of online purchasing. Despite this potential, the
market is however characterized by challenges including gaining consumer
loyalty and trust and the development of compelling, easy-to-use online
platforms.
Scope
- Detailed quantitative analysis of the market for online grocery provision,
including value sales overall, per capita, and by CPG category.
- Qualitative examination of the ' who, when and why' of online grocery
purchasing, and the challenges that persist in growing the consumer base.
- Detailed action points offering practical strategies based on the trends
and insights analyzed in the report.
- Covering nine core countries across Europe, North America and Australasia;
France, Germany, Italy, Netherlands, Spain, Sweden, UK, US and Australia.
Highlights
Consumers are clearly increasing their spend on groceries online, although the
market is more developed and diversified in Europe (and particularly the UK)
than the US. Food accounts for the bulk of online grocery, with the US market
being particularly food focused with sales (53% of total online sales compared
to 43% in Europe).
Grocery shopping is a task that many consumers are likely to perceive more as
a time-intensive chore than something they enjoy and consequently are eager to
seek efficiencies in its conduct. Time-saving features such as ease of website
functionality and save-able shopping lists are increasingly essential in
creating a compelling online offering.
Consumers' purchase decisions are increasingly driven by the need to satisfy
their particular sensory or experiential needs. This fact poses a particular
challenge to online retail, especially in the grocery market, as appearance,
touch, smell and related attributes are impossible to convey in the detached
online medium.
Reasons to Purchase
- Understand the key issues affecting the market for online grocery shopping.
- Access detailed quantitative and insightful qualitative data aggregating
the most compelling and recent research in this timely and important topic.
- Improve your marketing within online grocery by following best-practice
guidelines for more effective on-trend targeting and relevant communications.
Table of Contents
- Overview
- TABLE OF CONTENTS
- Table of Tables
- Table of Figures
- THE FUTURE DECODED
- Introduction
- TREND: Consumers are spending more on groceries and food online
- Strong European online grocery growth contrasts weaker development in
the US
- The bulk of consumers' online grocery purchases are food
- Despite its strong growth, online food and grocery still only
accounts for a small part of the total market, demonstrating its huge
potential
- Wider availability of Internet access and advances in broadband
technology have driven accessibility to online retailing
- Connection speeds are forecast to continue advancing
- Key take-outs and implications: significant growth opportunities exist
within online grocery as consumer connectivity rises
- TREND: Online grocery shopping development varies by country
- Brick and mortar retail chains have dominated online grocery shopping
in Europe
- Cultural differences initially constrained the Australian online
grocery shopping market
- US online grocery has suffered a slow start due to lack of brand
awareness amongst consumers
- Key take-outs and implications: the most successful distribution
strategies build on existing brand recognition and infrastructure
- INSIGHT: Convenience is the key attraction for time-pressured consumers
to shop online
- Time-scarcity and stress-reduction are key drivers in online grocery
purchase behavior
- In order to provide convenience, flexibility is key
- Increased store sizes and crowded supermarkets mean that online
shopping offers a timesaving alternative to in-store shopping
- Ease of use in website functionality is a key attraction for consumers
- Online shopping lists offer time-saving, economic and health
advantages to consumers
- Key take-outs and implications: differentiation in stressing online
convenience can be achieved through providing user-friendly functionality
and custom features that personalize the shopping experience
- INSIGHT: Limitations in sensory testing are potential inhibitors to
growth
- Consumers like to touch and see the food that they are buying
- Trust is a key issue impeding online purchases
- The security of payment over web-portals is a key concern for
consumers
- Customer service and flexibility in delivery are major issues
- Key take-outs and implications: quality assurance in produce and
transaction security are essential factors in building consumer confidence
in online grocery
- INSIGHT: Age, gender and income impact on the frequency of online
spending
- Internet penetration and online spending differs widely between age
groups
- Consumers with parental and professional responsibilities are the
key online grocery shoppers
- Men are more confident than women about buying goods and services over
the Internet, but are less confident where grocery items are concerned
- Traditional gender roles still characterize online purchasing
behavior
- Male consumers are more impulsive online shoppers than females
- Educational attainment, income levels and location also play a key
role in online grocery spending
- Internet use is dependent on consumer income levels
- Consumers are responding to high gasoline prices by shopping online
- Key take-outs and implications: retailers must recognize their key
audience groups and respond with tailored services
- ACTION POINTS
- ACTION: Push convenience to the front of your online offer
- Ensure that there are a wide range of delivery options to appeal to
time-pressured consumers
- In order to cover the investment and service costs,
- Ease of website navigation and use are key attractions for consumers
- ACTION: Gain customer e-loyalty by building a reputation for reliability
and security of payment
- Transparency is key to gaining consumer trust
- Human interaction in the form of excellent customer service is a key
attraction for consumers
- Customer support is arguably more important in online grocery than in
traditional channels
- Offering free returns to stores enhances retailers' service credentials
- ACTION: Make customization features central to your consumer-facing
online infrastructure
- Apply customization and personalization strategies to online shopping
lists
- ACTION: Ensure consistency between online and store branding
- See online shopping options as an asset, not a threat to traditional
bricks-and-mortar sales traffic
- Use online promotions to drive offline sales
- ACTION: Address the issues of freshness and trust in home-delivered food
quality
- Case study: FreshDirect offers freshness and high quality conveniently
through direct sourcing and in-house preparation
- APPENDIX
- Definitions
- Methodology
- Further reading and references
- Datamonitor reports
- Academic sources
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Overall and per capita online grocery market, Europe, US and
Australia, (US$ m), 2002-2012
- Table 2: Overall online grocery market, by category, Europe, US and
Australia, (US$ m) 2002-2012
- Table 3: The number of broadband Internet subscribers in Europe, US and
Australia (millions) 2002-2012
- List of Figures
- Figure 1: Convenience and lower prices are the leading considerations
for consumers when shopping online (% of online shoppers), UK, 2006
- Figure 2: Tesco Direct allows consumers to select a two hour delivery
slot while they shop allowing them freedom to browse at their convenience
- Figure 3: Websites that educate consumers on how to shop online will be
held in high regard
- Figure 4: Creating an online shopping list provides consumers with a
number of time saving benefits
- Figure 5: Online spending by socio-economic group (per head US$ and
share of total%) 2006
- Figure 6: Amazon' s Fresh Pre-Dawn delivery exemplifies the idea of
offering convenient, value-added services to engender consumer loyalty
- Figure 7: Case Study: FreshDirect successfully addresses the demand for
fresh produce provision via a convenient online ordering system
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