New research launched today by research organisation IGD in association with The Consumer Goods Forum anticipates transformation ahead for online food and grocery retailing. Across three critical markets it forecasts the following growth rates:
- UK: online grocery sales to grow by 48 per cent by 2022 and account for 7.5 per cent of the total UK grocery market
- China: online grocery sales to grow by 286 per cent by 2022 and account for 11.1 per cent of the total Chinese grocery market
- US: online grocery sales to grow by 129per cent by 2022 and account for two per cent of the total US grocery market
Due to be highlighted at The Consumer Goods Forum’s annual Global Summit in Singapore in June, the latest insights argue there are three main reasons why no grocery retailer or supplier can afford to downplay online retail:
- Across most of the world, online is already a fast-growing channel
- Online and offline are merging, with an online store vital to complement physical stores
- The digital world evolves faster than the physical one and online stores will become increasingly compelling
With over half (54 per cent) of food and grocery businesses only just starting to prepare for tomorrow’s digital transformation and 11% yet to begin, IGD has set out its vision of the online store of the future and what it will mean for retailers and manufacturers.
Based on a survey of 223 senior industry members across 42 different markets and a series of in-depth interviews, digital experts expect to see dramatic changes in the competitive landscape.
Seventy-eight per cent of respondents think shoppers will use online price comparison services more regularly to switch to the cheapest retailer, while 67 per cent believe shoppers will be able to choose from a wide range of specialist online retailers underpinned by a common and consistent delivery service. Additionally, 75 per cent expect more manufacturers to sell directly to consumers online.
Combining industry input with IGD’s global team of experts, the research concludes that the online store of the future will contain five key features:
- It will be a shopper’s personal micro store offering individualised and online-exclusive products, personalised promotions, recommendations, advertising and loyalty schemes. 69 per cent of respondents believe some retailers will apply personalised pricing and promotions in future. An additional 77 per cent think almost all digital communication to consumers by retailers will be personal.
- It will act as a smart personal assistant, connecting with various devices, preventing shoppers from running out of products and supporting their lifestyle goals. Nearly two thirds (60 per cent) of the experts surveyed predict that smart devices automatically re-ordering products will become a firmly established way of shopping for many people. The shopping experience will also be more inspirational, through personalised planners and sophisticated digital assistants like chatbots. 71 per cent of respondents expect some retailers to provide a service to offer personalised dietary guidance.
- It will be more efficient for shoppers, easier and quicker to order products. Login and payment will be available through facial, voice or touch recognition technology. Shoppers will incur less waste, with a greater choice of pack sizes and meal planners to help manage quantities and advise on using leftovers. A better fulfilment service will be on offer with more deliveries, on time and in full and products delivered at the right quality and freshness.
- It will help give shoppers a frictionless combined offline and online shopping experience. People will switch seamlessly from shopping online and instore with data cross-referenced between the two. This will help bring more personalisation to the physical store and help shoppers find their favourite products quickly and discover new ones. This is an opportunity that many companies need to work on with over half (53%) survey respondents saying they haven’t or have only just started to integrate their online and offline teams.
- It will at times be invisible, with shoppers buying products from shoppable digital content such as videos, photos and social media. In the future, people can be shopping at any time. There will be no limits to when you can be shopping. China has been leading the merging of media, entertainment and shopping, and Europe and North America will follow.