This week it was revealed that online sales of grocery products in the UK are expected to exceed 11 billion pounds this year, as more consumers are purchasing their weekly groceries online than ever before. This is an increase of more than 1 billion pounds from 9.9 billion in 2016. According to the figures by Mintel Research, the amount of shoppers buying all or most of their food online is also continuing to increase.
Mintel predict that by 2021 the online grocery market will be worth an estimated 16.7 billion pounds. Almost a third of consumers surveyed in the study reported that in the past 12 months they did the greater proportion of their shopping online. And the amount of people who say that they do their grocery shopping exclusively online has doubled over the past 3 years: 14% now do all of their shopping online – up from 7% in 2014.
Online grocery growth
Altogether, 48% of people now do some percentage of their weekly grocery shop online – that’s 5% more than in 2014. According to Nick Carroll, Senior Retail Analyst at Mintel, this means that online grocery is now experiencing the fastest growth of any grocery channel:
”Once seen as simply a service to replicate the needs of a supermarket shop online, a number of new services came to market in 2016 that have the potential to elevate online grocery beyond this barrier and adequately serve the more fluid and frequent shopping behaviours seen in the wider market. Growth is being driven by encouraging users who have done most or some of their shopping online to do more. This suggests that it’s just as crucial for online grocery retailers to engage as much with their current consumer base as it is for them to attract new shoppers to drive sales.”
Focus on younger shoppers
Only 1 in 3 over 55s have tried online grocery shopping. Half of this age group say that they have never bought groceries online and have no interest in doing so. Nick suggests that the key to growth and longevity in the market is to focus on the amount of younger consumers shopping for groceries online instead:
“The fact that younger consumers are far more likely to shop online highlights that rising smartphone ownership and internet connectivity has created an expectation from consumers that they can get what they want, whenever they want it. A younger online grocery shopping consumer base means it is crucial that grocery retailers have a well thought-out desktop and mobile site to best interact with the core online grocery consumer base.”
Same day delivery and discounters could tempt more online
What else can retailers do to entice online shoppers? Well it would appear that same-day-delivery is high on the consumer wish list. And up to 60% of respondents said that they would like to be able to shop online at discount supermarkets such as Lidl and Aldi, as Nick concludes:
“A number of same-day grocery delivery services have launched in the past year from both established players and new entrants to the market. While providing a same-day delivery service is highly challenging, it is something that consumers are demanding. When it comes to the discounters, they have been a disruptive force in the UK grocery market, but this has been limited to physical retail to date. Our research shows there will certainly be a market for the discounters if they decide to take the plunge into online retailing.”
If the forecast is correct, then it looks like the discounters would do well to get in on the online grocery trend, although they may experience some problems with fulfilment in the same way that discount clothing retailer Primark could not find a cost-effective way of selling online. If you buy your groceries online what would be high on your list for desirable factors when choosing an online supermarket? Perhaps you prefer to shop in store and pick out your own fruit and fresh produce? Tell us your thoughts in the comments section below!