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The Future of Online Grocery Shopping Product Image

The Future of Online Grocery Shopping

  • Published: June 2010
  • 69 pages
  • Datamonitor

Online grocery shopping has continued to rapidly evolve in recent years, facilitated by ongoing development of internet and mobile communications. However, the market still faces key challenges in breaking out from niche status. Success will be dependent on meeting expectations of greater choice, consistent quality, convenience and more effective direct engagement in retail-consumer relationships.

Scope

- Detailed insights and analysis documenting the drivers behind the evolution of online grocery shopping

- Key country-by-country data outlining the market size by category and occasions, and consumer survey findings

- Strategic conclusions and actionable recommendations

- Covers France, Germany, Italy, NL, Russia, Spain, Sweden, UK, US, Canada, Brazil, Australia, Japan, ROK, China, India, Saudi Arabia, UAE, S Africa

Highlights of this title

Grocery shopping has been described as the next star performer of online retailing. The comparatively low percentage of the sales of online channels to the overall grocery industry has already captured wide interest in the industry trying to utilize consumers' general experience of shopping online.

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Overview
Catalyst
Summary

THE FUTURE DECODED
INTRODUCTION: Online grocery shopping is changing how consumers buy their groceries in many countries
The development of online grocery shopping is subject to a number of drivers and inhibitors

TREND: The online grocery market is forecast for steep growth in the next five years
Online grocery growth is dramatic, particularly in developing high growth markets
The UK is the global benchmark in per capita spending potential for online grocery
Food is the biggest category while personal care and household care have shown ample growth
Broadband penetration is an important external influencer on the online grocery market
Key takeouts and implications: online grocery shopping is set for further growth on the bases of continued development of infrastructure and changing consumer behavior

TREND: The frequency of buying groceries online is continuing to rise
Online grocery purchase occasions are estimated to increase parallel to market growth through 2014
Spending per purchase occasion shows continual growth, suggesting the market has been persistently expanding
Key takeouts and implications: occasions growth suggests a growing audience although faster spending growth hints at growing frequency among existing consumers

INSIGHT: Demographic variations influence the uptake of online grocery shopping
Men are more likely to have engaged in buying groceries online
Younger generations are more likely to have used online grocery shopping
Key takeouts and implications: regional development influences the uptake of online grocery shopping, with age as another key factor

INSIGHT: Key drivers behind the appeal of online grocery shopping include convenience and cost control
Convenience is and will remain a key appeal to consumers
Newly developed technology such as mobile phone applications have been employed to strengthen the benefit of convenience
Consumers turn to online supermarkets to help constrain their grocery spending as an effect of economic downturn
Key takeouts and implications: the ideal for online grocers is to balance convenience with best value

INSIGHT: Sensory appeal, perceived higher cost, and trust issues are major obstacles hindering the growth of online grocery shopping
Many consumers are yet to consider online as a main channel for their grocery shopping
Online grocery shopping faces difficulties in satisfying consumers' sensory needs during the purchase process
Quality concerns particularly on perishables are central to many consumers' reticence to pursue internet purchasing
Transaction issues also act as inhibitors to growth
Key takeouts and implications: online grocery operators face continued challenges in changing consumer perceptions and growing penetration

INSIGHT: Latest developments among online grocers reflect the necessity of keeping up with the changing needs and preferences of consumers
General brick-and-mortar grocers are attempting to address their distribution challenges
The 'order online and pick up in-store' model is another option for retailers in tackling distribution challenges
Online portals need to evolve to respond to consumers' convenience and connectivity needs
Specialized grocers are seeing success via a move online
Opportunities exist for e-retailers outside the food and beverage sphere to leverage their online platforms and move into the market
Key takeouts and implications: online services are becoming more diverse and responsive to consumers' particular needs

ACTION POINTS
ACTION: Grocers should utilize social media to proactively manage relationships with customers
ACTION: Personalize promotions tailored to consumers' preferences
ACTION: Online shopping lists present further opportunities for increasing convenience
ACTION: Modify current offerings by mix-and-matching different purchase platforms and presence to increase consumer loyalty and options
ACTION: Focus on building consumers' trust in product quality, especially in fresh goods, and in security and efficiency of online operations
The online service needs to engender consumer trust in terms of its security and efficiency

APPENDIX
Methodology
Further reading and references
Ask the analyst
Disclaimer

List of Figures
Figure 1: Online grocery shopping is influenced by a variety of positive and negative factors
Figure 2: Despite the different stages of development, online grocery market in 19 countries across the globe are expected to see further growth in the next five years
Figure 3: Overall online grocery value (US$ million) in 19 countries across Europe, the Americas, MEA and Asia Pacific, 2004-14
Figure 4: Consumers are set to spend more shopping for their groceries online in the near future
Figure 5: Online grocery spending on a per capita basis (US$) in 19 countries across Europe, the Americas, MEA and Asia Pacific, 2004-14
Figure 6: Overall online grocery market by category in Europe (US$ million), 2009
Figure 7: Overall online grocery market by category in Europe (US$ million), 2004-2014
Figure 8: Overall online grocery market by category in Americas (US$ million), 2009
Figure 9: Overall online grocery market by category in the Americas (US$ million), 2004-2014
Figure 10: Overall online grocery market by category in Saudi Arabia, UAE and South Africa (US$ million), 2009
Figure 11: Overall online grocery market by category in MEA (US$ million), 2004-2014
Figure 12: Overall online grocery market by category in Asia-Pacific (US$ million), 2009
Figure 13: Overall online grocery market by category in Asia-Pacific (US$ million), 2004-2014
Figure 14: Broadband penetration rate and broadband subscribers in countries across Europe, Americas, MEA and Asia-Pacific, 2009
Figure 15: Number of broadband subscribers (in millions) in 19 countries across Europe, Americas, the Middle East, South Africa and Asia-Pacific, 2004-2014
Figure 16: Broadband penetration in 19 countries across Europe, the Americas, the Middle East, South Africe and Asia Pacific, 2004-14
Figure 17: The number of online grocery shopping occasions is set to increase from 2009 to 2014
Figure 18: Number of online grocery shopping occasions (in millions) across Europe, Americas, MEA and Asia-Pacific, 2004-2014
Figure 19: In sync with the increasing trend of online grocery shopping, consumers are expected to spend more on each occasion
Figure 20: More men have bought grocery online than women, but regional differences prevail
Figure 21: The development of broadband penetration does not appear to affect the percentage of consumers in both genders using online grocery shopping service
Figure 22: A higher percentage of younger generation consumers have conducted their grocery shopping online
Figure 23: Convenience-related factors are the main appeals to US consumers to shop for groceries online
Figure 24: Going mobile is a key trend among many e-grocers
Figure 25: Only one in four consumers have bought groceries online in the past month
Figure 26: Consumer survey: In the past MONTH, how often have the following occurred? You bought groceries online
Figure 27: Online grocery shopping remains a minority despite high growth in some countries
Figure 28: In Japan and Korea, major supermarkets have jumped on the internet bandwagon too
Figure 29: The format of order online and pickup in store is starting to pick up in the US
Figure 30: Chronodrive tweaked its operation model to appeal to consumers in France
Figure 31: Flixsoft's Grocery Gadgget Shopping List offers an example of mobile technology that could be offered by stores as a means of enhancing the customer experience both instore and at home
Figure 32: Value-for-money promotions are prominent in attracting savings-driven consumers
Figure 33: Organic grocers have been utilizing internet as a platform to successfully approach consumers
Figure 34: Specialized online grocers could be seen as a building a new platform between manufacturers and general consumers
Figure 35: Oisix is a successful example of organic food retailer in Japan
Figure 36: Benesse successfully captured specific target consumer group with easy and effective meal solutions in Japan
Figure 37: E-retailers such as Amazon could take advantage of its existing delivery system to enter the online grocery market
Figure 38: Utilizing social communities could help to increase 'stickiness' of customers
Figure 39: Focus on overcoming the concern of quality and freshness holds the key for online grocery shopping

Note: Product cover images may vary from those shown

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