Online grocery delivers huge potential
More than four in 10 (42% of) grocery shoppers in the UK could potentially be converted to online shopping, according to research being unveiled at IGD’s Online & Digital Summit this week, offering huge opportunities for growth in this fast-evolving market.
IGD is forecasting online to be the fastest-growing part of the UK grocery market over the next five years, almost doubling in value from £8.9bn in April 2015 to £17.2bn by April 2020. In recent years there has been significant growth in the number of shoppers using the online grocery channel, with a quarter (26%) now saying they have shopped online for groceries in the last month versus a fifth (22%) in 2010.
According to IGD ShopperVista data:
42% of all grocery shoppers in the UK have indicated that they would consider converting to online shopping
26% already class themselves as regular users of online grocery, while 11% of all shoppers say it is where they do most of their shopping
33% of shoppers deem themselves lapsed online grocery shoppers. Nearly half (47%) of that group haven’t shopped online in the last year and 28% haven’t done so in the last two years
Ben Miller, Director of Retail Insight at IGD, says: “Online is still on a rapid growth curve, as people make the most of new devices, lower delivery charges and minimum spends, plus greater access to click and collect points.
“Those shoppers who have lapsed from online – or never tried it in the first place – told us that lower delivery charges, better selection of quality products and more accuracy on ordering could encourage them to make the switch. With the rapid improvements we have seen in online grocery over the last two years, there is every reason to believe that many shoppers would really enjoy today’s online grocery experience.”
Online grocery shoppers also tend to be slightly more loyal, according to IGD ShopperVista, with 54% saying they are always loyal to the same retailer against 50% of in-store shoppers. There is also a trend to conduct larger shops online than in-store, with 80% of online grocery shoppers claiming to do their ‘big shop’ online.
Ben Miller adds: “Clearly, once shoppers have trialled online, many then use it as their main form of grocery shopping, demonstrating growing levels of convenience and loyalty. Online offers a great opportunity for retailers to really encourage loyalty, with the rise of delivery saver passes, preferential delivery slots and money-off incentives all extremely appealing to shoppers.
“We expect 2016 to be a fascinating year in online grocery retail, with influential players such as Amazon potentially set to push the boundaries of innovation even further. As retailers invest even more in their online operations and the shopping experience improves yet further, attracting and retaining that all-important shopper loyalty will clearly become even more crucial.”