The United Kingdom’s food and grocery sector is one of the most dynamic and competitive markets on the planet, with IGD predicting 10% market growth to £196.9bn over the next five years. Underpinning this dramatic growth is online which remains the foremost growth channel at +68%.
Today, almost half (48%) of Brits are current online grocery shoppers, with one in ten (11%) doing all of their grocery shopping online, and a further 12% doing most of their grocery shopping online. Nick Carroll, Retail Analyst at Mintel, believes this growth is driven by increasing consumer convenience.
“The shift away from superstores to more convenient shopping channels is certainly benefiting the market with the majority of consumers now doing some grocery shopping online, and almost a third saying that they now shop online more than a year ago,” he said.
And whilst the majority of online shoppers do still mix online shopping with store-based shopping, consumers are becoming increasingly comfortable shopping at online-only retailers, a shift that’s forcing traditional bricks and mortar retailers to ensure their online shopping experience measures up.
Many large store operators are pursuing a number of initiatives, ranging from a focus on click and collect through to leveraging smartphone store navigation technology, to remain competitive.
Tesco’s Online Customer Proposition & Trading Director, Eve Henrikson, believes this focus on mobile experience is key to remaining competitive in a sector experiencing increased competition.
“Mobile plays an important role and has for a number of years now superseded traffic we receive from other devices. Many of our customers use their mobile not just for shopping online but also researching products before they shop or whilst they are in our stores,” she said.
“Many of our customers also use multiple devices as part of an online grocery order. They might place the order on their tablet, then continue adding and removing items until the morning of the day their delivery is due on their phone or desktop. We therefore need to ensure that the experience is consistent and simple whatever device they use.”
Martin Newman, Founder and Executive Chairman of e-commerce and multi-channel retail consultancy Practicology, believes this focus on mobile needs is paramount to ensure customer’s get what they need.
“Retailers need to focus on the entire journey along the path to purchase, and beyond. Customers often start their journey on their mobile phone and use their phone with increasing frequency when on the path to purchase. Whether that’s to price compare when they’re in a retailer’s store, or when they’re looking for a particular brand or product ‘near them’, or even just to transact directly from their mobile,” he said.
“The big change in the last 20 years is that the balance of power has shifted from the retailer to the customer. And mobile is at the heart of putting the customer in control of where, when and from whom they buy. It’s a core part of the customer’s journey, so it needs to be treated as such.”
Given mobile’s central role in many consumers’ lives, it’s not surprising that Tesco has taken a ‘convenient commerce’ approach in order to stand out in the online retail sector by focusing on making their customer’s lives easier.
“We want to understand how we can help our customer’s in their daily, often very busy lives. For many people online grocery shopping is an opportunity to save time, so we focus on offering a convenient and reliable shopping experience that helps with that. This includes a user-friendly and simple online experience, delivery and collection options that fit around your day – be that three weeks in advance or today, and helpful service at your doorstep through our delivery drivers,” she said.
“But just having an easy to use mobile offering isn’t enough anymore, you have to do more to stand out. Sometimes it’s small things that can make all the difference for our customers. For example, we automatically save customers’ favorites from previous shops which is often used for repeat orders.
For Christmas we created suggested shopping lists for all of our customers – using a combination of customers’ past Christmas preferences and insight around festive shopping behavior to surface personalized recommendations. These initiatives have been really well received, so we know we’re on the right track.”
Eve Henrikson and Martin Newman are keynote speakers at this year’s iMedia Online Retail Summit, running May 1st-3rd on the Gold Coast. For more information: www.onlineretailsummit.com.au