In focus: E-Grocery
The past year saw 3.4 billion shopping trips less than before COVID-19 across Europe.
The pandemic crisis put touch points under pressure.
Last year, shoppers spent as little time in store as possible, preferably at as little places as possible. Many stopped going to the store altogether, and moved their purchasing online.
The decline of in-store face time means findability is key to success, defining how consumers shop, the time it takes, their choice of stores and channels, how they browse through the (online) store and how they find the right products.
Shoppers went to the stores less often and speeded through, significantly reducing your opportunity to be seen. Rethinking how to reach shoppers with pre- and in store promotion is becoming more important than ever.”
Many consumers also turned online for their main groceries, especially to the benefit of specialized online shops.
E-grocery value share nearly doubled in two years, raising expectations with regards to findability and online customer experience, read on in the next chapter to find out more.
What will stick in 2022
Source: GfK ad hoc study Behavior Change
After a period of alleviation in summer, the now once more imposed restrictions due to COVID-19 could last well into early 2022.
This will obviously work in favor of speedy shopping and e-commerce, despite the fact that online customer satisfaction still calls for substantial improvements, as the most recent GfK survey on e-grocery (November 2021) found.
Once we have overcome the pandemic crisis, some new shopping routes and routines will nonetheless persist:
The increased use of new technologies (net expectations1: +17%), making a shopping list (+15%) and buying different products than before (+11%) are ranked as top expectations by shoppers for the next 12 months.
Purchasing online, the reduction of in-store face-time and buying different products implies, findability is key to success and future growth.
Asked, how shoppers come across new products, promotions and roaming through shelves are top mentions, both at 51%, in Denmark even 65%. Commercials and ads as a source are only ranked third at 39%. Clearly, hasty and planned shopping threatens product adoption.
Modern technologies such as self-scanning will become mainstream. Already a standard in countries like the UK, Ireland and France, this will also happen in Germany. More services and in-store excellence are indispensable.”
1 Net expectation: Share of shoppers that intend to do the behavior (a lot) more minus the share of those, who intend to do it (a lot) less.
Unlike other industries, online shopping for groceries was by no means commonplace – before COVID-19. Shopping regulations, supply shortages and especially safety considerations have dramatically changed shopping behavior and bestowed unexpected growth rates on e-grocery.
Meanwhile, numerous companies jumped on the bandwagon and the e-grocery landscape is expanding exponentially, be it via ever faster delivery, subscription models, D2C and farm-to-fork initiatives, or the exponentially growing presence of pure players and platforms.
Maturity levels in e-grocery value share across Europe highly differ, with the UK leading the way, well above 10%. In continental Europe, France, Sweden and the Netherlands have the highest value shares, the latter ranging among the fastest growing, up to 9% (H1’21) from only 4% in the first half of 2019.
Many online retailers welcomed new buyers, as the advantage of safe and hygienic shopping drove shoppers toward e-grocery. Italy and Russia achieved the highest and most stable penetration around 40%.
The recent GfK report "Friction in e-grocery: experience as a growth driver“, across eight European markets*, clearly shows that buying everyday goods online is taking flight.
Only 22% of shoppers did not buy anything online in the past year, and the majority even made a purchase within the last month.
*AT, BE, CZ, DE, IT, NL, PL, RU
Flash delivery, and dark stores and dark kitchens following in its wake, are investor darlings. Usage rates are picking up, especially in Italy, Poland and Russia, with Glovo and Pyaterochka in the lead.
67% of European shoppers at least know one flash delivery service, and about half of them have used at least one. As the most important occasion being instant gratification, ordering food and or drinks for direct consumption, flash delivery is competing heavily with established convenience and out-of-home favorites.
E-supermarkets continue to be the first choice of online grocery shoppers (will shop next year, if available: 72%), followed by category specialists (70%). Other e-grocery services that shoppers are expecting to use include D2C (62%), platforms (61%) and flash delivery with the potential of most new buyers (55%), however predominantly in urban habitats.
Despite all the buzz, it is striking, that online satisfaction cannot beat offline. With the exception of Russia, shoppers feel more fulfilled offline than they do online. When looking closely into what drives (dis)satisfaction, we see that simplicity, findability and especially experience are crucial.
Creating a more inspirational, personal and fun online grocery shopping experience trip will create exponential growth.”
Along the e-shopper „maturity curve“, fixing findability is a must for light, inexperienced shoppers. Missing options for the comparison of relevant alternatives and pack sizes currently generate high dissatisfaction rates.
Satisfying heavy buyers is an even bigger challenge, as the user experience has a strong influence on their online retailer choice (index 186), and heavy buyers are more inclined to switch retailers. Satisfaction drives loyalty, loyalty drives bigger, more frequent baskets – fundamental for online profitability.
Heavy buyer satisfaction is in extremis linked to inspiration and fun, so the “big fixes” are more enjoyable shopping, rewarding loyalty, offering one-to-one support and personalization.
Imagine if you could add 2€ to every online shopping basket of a heavy buyer, we’d be adding more than one billion in revenue in just in these 8 countries.”
Uncovering friction in e-grocery