Will online grocery gain traction in 2017?
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
The slow take-off in online grocery shopping in many Western markets is partly due to consumers remaining skeptical of product quality and convenience, according to a global study from Euromonitor International for SIAL Paris. At the same time, internet delivery services remain expensive and logistically difficult to implement for retailers.
Further, the recent rise of discounters, with limited online options, has inhibited online shopping.
While South Korea, China and the United Kingdom have seen noticeable traction in online grocery in recent years, “the numbers generally remain relatively unimpressive for many countries. By 2019, many markets which are conducive to internet retailing growth will see sales hover around 3-4 percent of total grocery shopping,” the report states.
Some key takeaways from the study:
Food shoppers follow the same habits online and offline in Western Europe: Staple foods account for the greatest share of both food baskets.
The product mix will blend value with exclusive online options: Smaller snacking products are not popular with retailers for sale online due to their low cost. Consumers don’t want these products online anyway. Larger pack sizes appeal to both retailers and shoppers online.
Impulsivity will be re-imagined: Impulse purchases can be powerful online. Companies need to work with retailers to maximize the visibility of their products online and increase the possible interactions shoppers can have with their products. Services such as Amazon Dash have real potential as impulse channels.
Interacting with Amazon and Google will be important in the U.S.: With their greater online expertise relative to brick-and-mortar rivals, the importance of Amazon and Google in the future of U.S. grocery retailing should not be underestimated. Manufacturers should boost their presence on these platforms.
DISCUSSION QUESTIONS: What are the biggest impediments to online food retailing in the U.S.? Do you see online grocery gaining significant momentum in 2017?