The future of the grocery battle will be online, data reveals

Feb 28, 2020

Erik Wallin

Desk Top View
Desk Top View

When it comes to the world of grocery retail, the future battleground will be online. The widespread use of smartphones is a key contributor to this, supporting increased online grocery penetration figures across all age groups.

Consumers around the globe are embracing online grocery shopping. Most recently, figures from the Online Shopping Trends Q2 2019 research report from Swedish Digital Trade and HUI have highlighted how quickly penetration levels are increasing.

The report looks at the Swedish market in particular, which saw a huge jump in the number of people shopping with online grocery retailers between 2016 and 2017. This was led by 26–35-year-olds, with online shoppers jumping from just over 40% to nearly 60% in a single year. A similarly substantial jump was seen across both the 18–25 and 36–45 age groups. While older shoppers have been slower to embrace online grocery shopping, those aged 46–55, 56–65 and 65+ all still recorded increases.

The ability to shop from their smartphones is one factor that is driving consumers to buy more of their foodstuffs online. For Millennials and Gen Z (those aged 16–22) in particular, the bond between smartphones and shopping is a strong one. The ability to pay with smartphones, as well as using them to order food, means that more than half of Gen Z feel less secure without their phone than they do without their wallet.

Younger consumers’ ‘always-on’ relationship with the internet is also driving the increase in online grocery shopping. According to Snap, Inc. and GlobalWebIndex, who surveyed 79,000 Gen Z internet users spread across 45 markets, 64% of Gen Z report being constantly online.

Adobe, meanwhile, reports that Millennials are spending an average of 8.5 hours per day engaging with online content, whether through reading, watching, creating or engaging. This includes those using their online time to order their groceries. 5.2 of those hours are spent on their smartphones. Members of Gen Z, meanwhile, spend 5.9 hours per day using their phones.

The sheer number of people who own a smartphone also comes into play when it comes to explaining the rapid increase in online grocery shopping penetration. The Snap, Inc. and GlobalWebIndex survey found that a staggering 97% of the 79,000 respondents own smartphones.

However, there are other factors at play too. Shopping online is often a far more relaxing experience than shopping in-store, particularly when it comes to buying food. Consumers are increasingly choosing to avoid busy car parks, inclement weather and queues in favour of shopping from the comfort of their own sofa. They can shop at their own pace, potentially enjoy a greater product range than their nearest store offers and enjoy the convenience of double-checking their cupboards for items that they might need for recipes, such as herbs and spices.

Online recipe services are also doing much to enhance the shopping experience. Many online retailers are embracing services such as Northfork for that very reason — they appeal to consumers and make their shopping experience easier and more pleasurable (as well as benefitting the retailer by increasing cart value).

Using Northfork’s integrated recipe service, shoppers can search through thousands of meal ideas for inspiration, then add the ingredients to their cart at the click of a button — or the tap of a screen. They can also choose to prioritise organic ingredients, budget items and more, with just a couple of taps, meaning that the shopping experience delivers personalised results in line with the individual consumer’s preferences.

No wonder, then, that grocery retailers are turning their attention to winning the online battle. Indeed, Walmart SVP digital operations, Tom Ward, recently used his keynote speech at the Groceryshop 2019 conference to highlight the importance of the chain’s connection to Tasty app with shoppable recipes, which is powered by Northfork.

As we head into 2020, we can expect retailers to focus even more on such features as they seek to conquer the rapidly growing target market of online grocery shoppers.