Online grocery shopping: the growth and impact
13 October 2015
Ruth Cousins, Marketing Executive, him!
As we become more entrenched in the online era, it comes as no surprise that online grocery shopping is on the up. Despite being one of the smallest channels within the UK grocery market, online is the fastest growing (ahead of even the headline grabbing discounters) and is predicted to more than double in value to £17bn by 2019!
With 13.5m UK adults now buying groceries online in a typical week, online now captures 8% of UK grocery spend.
Who is the online grocery shopper and what keeps them from visiting supermarkets?
The online grocery shopper is a higher spender but more price aware, they have a budget of £165 per week in comparison to £125 of the UK average. They are savvy and are more likely to compare prices between stores and use comparison sites as well as having a better awareness of prices charged across different retailers.
There are a number of reasons why shoppers are taking their grocery shopping online. For example, shopping online saves time in a number of ways - it means they needn’t go to a store, they can choose a suitable delivery time slot for them and they can organise what they need whilst still at home.
It saves people energy and money. 63% of online shoppers say that the delivery of heavy items is their main driver for going online. It also allows them to save money on petrol/travel as well as being able to take full advantage of promotions that are on clear view and compare prices from the comfort of their own home.
But what does the rise of the online shopper mean for convenience stores?
The rise of the online shopper is not necessarily a bad thing, in fact quite the reverse! Our research shows that the online shopper is actually very valuable to convenience stores as they still top up between shops - 6-in-10 ‘top up’ in-store at least once a week. In addition to this, online shoppers actually spend a bigger percentage of their grocery budget in convenience stores in comparison to the UK average, 16% vs 12%.
What can convenience stores learn from online retailers?
- Actively sell through effective communication by highlighting strong price and promotions, shelf life reassurance and the communication of useful information such as ‘v’ for vegetarian products.
- Many online grocery retailers maximise events to drive sales through themed promotions, such as with the Rugby World Cup and countdown to Halloween/Christmas. Convenience shoppers have told us that they want c-stores to do more to embrace these types of seasonal and sporting events!
- Online retailers offer various schemes and incentives to entice repeat shops and drive loyalty; incentives which will either save the shoppers money, or time such as discounted prices when shoppers commit to regular, multiple orders of a product.
Whilst the importance of online shopping is growing at an impressive rate there is still most definitely a place for convenience stores in the UK grocery market. The importance lies in how online retailers and convenience stores work cohesively.