Stable growth in 2019, explosion in 2020: COVID-19 has boosted E-Commerce in FMCG and we can expect the numbers to persist, also during the last quarter of 2020, especially on the background of an explosive Pandemic situation in Europe as well as major parts of other continents.
As a result, online grocery shopping could attract especially older target groups, who – for health reasons – try to avoid stationary outlets. If retailers can fulfill their expectation of “easy shopping and delivery”, this group of customers could prove extremely loyal beyond the pandemic.
Several pure online players, such as Rohlík, jumped to the occasion and launched in new countries, or, like Picnic, saw their business reach unexpected growth rates. They currently try to circumvent the delivery issue by focusing on big cities or metropolitan regions, which they can service economically from a restricted number of logistics centers.
Leveraging their stationary presence, omnichannel retailers will increase their Click&Collect services, thus leaving the choice to shoppers, in order to maintain or rather increase customer loyalty to the brand over a channel. In addition and in order to support stationary after the Pandemic, chances are high, that a number of shoppers turn their back on E-Commerce, which could also affect online shopping of FMCG.
Two other developments could present additional setbacks for E-Commerce in FMCG and slow down growth rates: The current criticism of big online players, such as Amazon, with regards to size and waste. While tech-savvy, especially younger shoppers could turn to other channels for their grocery shopping, if it is no longer “cool” to shop online.
The movement to more social responsibility and sustainability translates into a clear trend to buy and consume local products, especially fresh and dairy food. This presents an opportunity for traditional Corner Stores and weekly markets. In addition, Supermarkets are already addressing this trend by offering more and more fresh products from the region. While absolute niche players, farmers and growers’ associations increasingly allow for online ordering and local home delivery.
2020 has been an extremely difficult year around the globe, but COVID-19 resulted in an exceptional business year for E-Commerce in FMCG. It is more than unlikely, that the growth rates seen in some countries and regions this year, will continue at the same pace once the Pandemic lies behind us. However, if online retailers – pure play or omnichannel – identify and address local country specifics and preferences, they should be able stabilize their business and unlock new shopper segments.
Even COVID-19 couldn’t make Europe a ‘second East Asia’ with regard to FMCG e-commerce. But few Corona months, in particular April, with recruiting effects equaling years past meant a big step forward to catching up with the more advanced regions of the world. Still, shopping groceries online has not become the ‘new standard’.
But COVID-19 has helped e-commerce evolving from a newish fad of younger to a pretty normal thing throughout age groups. In some countries, on a higher level and quicker than in others, but everywhere into the same direction. But Corona was not just a quantitative gain for FMCG e-commerce, not just an acceleration of what has been observed in the past year.
It poses new qualitative questions to both, manufacturers and retailers:
1. Which effects are temporary? Which will stay, even if a vaccine ends the pandemic?
2. Who are the new online shoppers? Do we need a particular approach for the older?
3. Has Corona changed what is in the online basket? Does online replace store visits?