Table of Contents
- Overview
- TABLE OF CONTENTS
- Table of Tables
- Table of Figures
- THE FUTURE DECODED
- Introduction
- TREND: Consumers are spending more on groceries and food online
- Strong European online grocery growth contrasts weaker development in
the US
- The bulk of consumers' online grocery purchases are food
- Despite its strong growth, online food and grocery still only
accounts for a small part of the total market, demonstrating its huge
potential
- Wider availability of Internet access and advances in broadband
technology have driven accessibility to online retailing
- Connection speeds are forecast to continue advancing
- Key take-outs and implications: significant growth opportunities exist
within online grocery as consumer connectivity rises
- TREND: Online grocery shopping development varies by country
- Brick and mortar retail chains have dominated online grocery shopping
in Europe
- Cultural differences initially constrained the Australian online
grocery shopping market
- US online grocery has suffered a slow start due to lack of brand
awareness amongst consumers
- Key take-outs and implications: the most successful distribution
strategies build on existing brand recognition and infrastructure
- INSIGHT: Convenience is the key attraction for time-pressured consumers
to shop online
- Time-scarcity and stress-reduction are key drivers in online grocery
purchase behavior
- In order to provide convenience, flexibility is key
- Increased store sizes and crowded supermarkets mean that online
shopping offers a timesaving alternative to in-store shopping
- Ease of use in website functionality is a key attraction for consumers
- Online shopping lists offer time-saving, economic and health
advantages to consumers
- Key take-outs and implications: differentiation in stressing online
convenience can be achieved through providing user-friendly functionality
and custom features that personalize the shopping experience
- INSIGHT: Limitations in sensory testing are potential inhibitors to
growth
- Consumers like to touch and see the food that they are buying
- Trust is a key issue impeding online purchases
- The security of payment over web-portals is a key concern for
consumers
- Customer service and flexibility in delivery are major issues
- Key take-outs and implications: quality assurance in produce and
transaction security are essential factors in building consumer confidence
in online grocery
- INSIGHT: Age, gender and income impact on the frequency of online
spending
- Internet penetration and online spending differs widely between age
groups
- Consumers with parental and professional responsibilities are the
key online grocery shoppers
- Men are more confident than women about buying goods and services over
the Internet, but are less confident where grocery items are concerned
- Traditional gender roles still characterize online purchasing
behavior
- Male consumers are more impulsive online shoppers than females
- Educational attainment, income levels and location also play a key
role in online grocery spending
- Internet use is dependent on consumer income levels
- Consumers are responding to high gasoline prices by shopping online
- Key take-outs and implications: retailers must recognize their key
audience groups and respond with tailored services
- ACTION POINTS
- ACTION: Push convenience to the front of your online offer
- Ensure that there are a wide range of delivery options to appeal to
time-pressured consumers
- In order to cover the investment and service costs,
- Ease of website navigation and use are key attractions for consumers
- ACTION: Gain customer e-loyalty by building a reputation for reliability
and security of payment
- Transparency is key to gaining consumer trust
- Human interaction in the form of excellent customer service is a key
attraction for consumers
- Customer support is arguably more important in online grocery than in
traditional channels
- Offering free returns to stores enhances retailers' service credentials
- ACTION: Make customization features central to your consumer-facing
online infrastructure
- Apply customization and personalization strategies to online shopping
lists
- ACTION: Ensure consistency between online and store branding
- See online shopping options as an asset, not a threat to traditional
bricks-and-mortar sales traffic
- Use online promotions to drive offline sales
- ACTION: Address the issues of freshness and trust in home-delivered food
quality
- Case study: FreshDirect offers freshness and high quality conveniently
through direct sourcing and in-house preparation
- APPENDIX
- Definitions
- Methodology
- Further reading and references
- Datamonitor reports
- Academic sources
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Overall and per capita online grocery market, Europe, US and
Australia, (US$ m), 2002-2012
- Table 2: Overall online grocery market, by category, Europe, US and
Australia, (US$ m) 2002-2012
- Table 3: The number of broadband Internet subscribers in Europe, US and
Australia (millions) 2002-2012
- List of Figures
- Figure 1: Convenience and lower prices are the leading considerations
for consumers when shopping online (% of online shoppers), UK, 2006
- Figure 2: Tesco Direct allows consumers to select a two hour delivery
slot while they shop allowing them freedom to browse at their convenience
- Figure 3: Websites that educate consumers on how to shop online will be
held in high regard
- Figure 4: Creating an online shopping list provides consumers with a
number of time saving benefits
- Figure 5: Online spending by socio-economic group (per head US$ and
share of total%) 2006
- Figure 6: Amazon' s Fresh Pre-Dawn delivery exemplifies the idea of
offering convenient, value-added services to engender consumer loyalty
- Figure 7: Case Study: FreshDirect successfully addresses the demand for
fresh produce provision via a convenient online ordering system
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