The future of grocery shopping is online
The UK grocery market is £151 billion per annum of which online represents around 3%. Over the foreseeable future, the online grocery market is expected to experience significant growth at the expense of traditional grocery channels. Online grocery adoption is expected to be in line with other retail categories, driven by a number of complementary drivers:
BROAD PRICE POSITIONING ATTRACTS CONSUMERS
Price is intrinsically linked to consumer's perception of value, with value driving interest. Online retailing provides consumers with greater visibility on price and value.
The online grocery challenge: to offer sufficient items across multiple price points without compromising quality and freshness.
RANGE EXPANSION INCREASES CONSUMER CHOICE
Consumers have more choice and are able to discover new products more effectively. This in turn influences consumer demand - attracting new customers and driving online sales growth.
The online grocery challenge: to provide a range of products, across three temperatures, that reflects and drives consumer interest without leading to excessive waste due to the perishable nature of groceries.
REAL TIME PRODUCT AVAILABILITY INCREASES CONSUMER LOYALTY
High product availability increases customer satisfaction and loyalty.
The online grocery challenge: maintaining high product availability across a range of categories to ensure that the average shop of 55 items is delivered in full.
ACCESS TO FRESH PRODUCE INCREASES CONSUMER CONFIDENCE
Increasingly efficient online supply chains, picking and delivery processes lead to more confident purchasing of fresh produce by consumers.
The online grocery challenge: dealing with short product life spans and handling and storing varied products across different temperatures zones from source to consumers' kitchens.
AT LEAST AS GOOD AS IN STORE
Providing consumers with produce of equal or better quality than they can choose for themselves in-store drives consumers online.
The online grocery challenge: food can be an emotive purchase, requiring consumers to be confident in their purchases and to build trust with an online grocer.
6 ease of use
CONVENIENCE & INTUITIVE ORDERING BRINGS CUSTOMERS BACK
Greater online access and the introduction of smart mobile devices enable consumers to shop any time, any place, anywhere. This increases consumer support for online retailing.
The online grocery challenge: providing easy and fast access to the 55 products in an average order across a large range of products.
FREEING UP CONSUMERS' MOST PRECIOUS ASSET
Reducing time spent on grocery shopping allows consumers greater flexibility and releases precious time for other activities.
The online grocery challenge: grocery shopping takes up a significant proportion of consumers shopping time compared to purchases of other goods. Getting consumers to change deeply engrained attitudes and habits is challenging.
ON TIME, AS ORDERED, EVERY TIME
On time delivery and minimal product substitution builds consumer loyalty and increases willingness to shop online.
The online grocery challenge: limited product life combined with the logistical challenges of delivering diverse customer orders on time within a tight delivery window.
PRODUCT INFORMATION INFLUENCES CUSTOMER DECISION MAKING
Real-time, accurate, intuitive and predictive information informs consumers' choice and enriches the customer experience.
The online grocery challenge: consumers want to make informed purchasing decisions requiring large amounts of product information including expiry dates.