Once upon a time, I used to be stricken with horror when I forgot to get my grocery list to the supermarket. Not that I always followed the list anyway, but that was back in the day. Today I’m a savvy online grocery shopper who doesn’t need lists! My weekly/monthly purchases pop up with click and I just need add a few extra goodies (if I’m feeling too generous) to hit Buy! I have a complete control over how much I spend and its convenience is exceptional.
With the rapid rise of digital services, consumers are getting accustomed to sourcing their needs online. So how can Groceries lag behind, being one of the most important necessities? The Consumers Packaged Goods (CPG) industry has been evolving itself right from the start. Digital changes have altered the way consumers eat and shop. The retail industry has been getting more competitive to be able to stay in the race. All in all, it’s a good world for consumers as customer experience is getting aggressively superior.
And there’s not just one way to shop your groceries online. You can use their Subscription model to automatically get your groceries delivered every month on a specified date and time. While you have been waiting for your train, you can also buy your groceries from a Virtual Supermarket where you can see posters of shelves filled with goods that you can scan (QR code) using your phone and have them delivered to your home when you’re back! Or you can also order your groceries online before going to work and pick them up from the store on your way back – the Click-and-collect model. With the likes of the Amazon Go model, you can avoid long checkout lines at the supermarket by simply picking your groceries and just walking out! Their technology detects when products are picked off the shelf and your amazon account automatically gets charged, thus offering a true Omni-channel experience.
To go or not to go online?
According to a survey held by The Hartman Group, 39% of consumers use online supermarkets to save time, 36% use it to save money, 27% use it to save fuel/driving and 15% to order food in large quantities. This growing trend is a boon for time-strapped customers who don’t want to travel or wait in long checkout queues. However, according to a Brick meets click report, there are about 60% consumers in the US who are not online grocery shoppers and who do not prefer to be one as they want to select, touch and smell their own fruits and vegetables before they buy it.
Adoption of Online Groceries around the world
Although grocery sales via online platforms represent a small portion of the overall grocery retail market, it is among the fastest growing sector. In 2015, the online groceries market generated sales worth $7 billion in the US and by 2020, statistics predict a whopping $18 billion of sales.
Currently, U.K is leading in terms of market adoption with almost half the shoppers being online grocery shoppers. By 2020, grocery sales are predicted to go beyond $19 billion. The rest of Europe also is catching up and by 2015 there was an increase of online grocery sales of 55% in the Dutch market, 38% in Germany and 25% in France.
The U.S, however is dominating in overall online grocery sales (partly because of its size), with the market total surpassing $42 billion in 2016. According to a report by CNBC, online grocery shopping could grow five-fold over the next decade!
Asia-pacific might still have many developing countries but the adoption of technology is one of the highest and major cities in India, China and South Korea are offering more online grocery options. The sales in China alone is expected to go beyond $180 billion by the end of 2020. India saw a great growth of 44% in sales of online groceries in 2016.
Overall, online sales of groceries take up about half the total digital market but as the digital economy matures, the growth is set to increase by 20% by 2018, outpacing the growth of 3% by brick and mortar supermarkets.