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RetailX Brand Index 2019

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Online grocery growth slows as shopping habits shift away from "the big weekly shop"

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Grocery home delivery growth slowing as shopping habits change, says Mintel
Grocery home delivery growth slowing as shopping habits change, says Mintel

Online grocery is showing signs of slowing down as shoppers switch from doing a big weekly shop, for which sites are optimised, to wanting a more of a top-up or on-demand approach.

 

The study, by Mintel, found that across 2018, 45% of UK shoppers did their grocery shopping online, down from 49% in 2016. Mintel also found 42% of older people said they had never bought groceries online and had no interest in doing so.

 

The picture isn’t all bleak, with the research of 2000 people finding that 10% of grocery sales were set to be online and delivered by 2023, compared to 7% in 2018 – making it likely to be worth some £19.8bn by then.

 

So why is growth slowing? The reasons are myriad, believes Nick Carroll, Mintel’s associate director of retail research. “Growth is slowing and the number of users is plateauing as retailers struggle to encourage new customers to try their services," he says.

 

Alongside this, of those who refused to shop online, 73% said they preferred to choose fresh products themselves. Nearly a quarter (24%) of reluctant online shoppers thought delivery charges were too high, while 18% did not like being subject to minimum spending levels.

 

More worryingly, 63% said they had had an issue with an order in the past year.

 

A big driver, however, is changing shopping habits, says Carroll. "Most importantly, online services are still best suited to the traditional big-basket weekly shop, at a time when consumers are increasingly shopping on a top-up or when-needed basis."

 

Tjeerd Brenninkmeijer, EVP of EMEA at Bloomreach, believes that this is something that retailers don’t pay enough attention to. Broomreach works with Harrods, All Saints, Halfords and Desigual to combine super search, personalised merchandising and contextual content to create the right web experience for the right shoppers.

 

“These figures hammer home the reality that every online shopping site needs to provide tailored homepages for different audience groups,” he says . “With such drastic viewpoints surrounding the merits of online grocery shopping across age groups, it’s clear that what works for younger shoppers will be a world away from what is needed to convert older shoppers.”

 

He continues: “Using data to understand the habits of site visitors will be crucial to steering online grocery shopping back towards growth, and this isn’t just about age. If a user never shifts from browsing to purchasing, providing a homepage that makes clear the brand’s commitments – whether it’s delivering products with good expiry dates or providing sensible substitutions – would be more likely to convince the customers they’ll be satisfied with their shop.

 

The Mintel study comes hot on the heels of research by Foolproof, which reveals that the high street has a surprising advocate: the younger ‘digital generation’. It finds that 58% of 18-24 year olds and 60% of 25-34 year olds stated that they would rather shop for clothes in-store than online. Maybe the shift in shopping is more complex than just a move from stores to the web?

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