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This factsheet is based on research included in IGD’s latest online report, Online Grocery Retailing: Building Capability for a Digital Future. Click here for more.
- Online grocery shopping in the UK
- Who are online grocery shoppers?
- The future
Online grocery shopping in the UK
Despite lagging behind other European and Asian countries in terms of internet penetration and levels of e-commerce engagement, the UK is home to one of the most advanced online grocery retailing markets in the world.
IGD estimates that grocery sales online amounted to £4.8bn in 2010, up 21.4% on the previous year, accounting for 3.2% of total grocery retail sales in the UK with growth lifted by shoppers increasingly adopting a multi-channel approach to grocery shopping.
Though its rate of growth has been rapid, online at present remains a relatively small and infrequently used channel. According to our recent ShopperVista research, just 6% of shoppers mainly use online for their food and grocery shopping (1), and those that do buy groceries online typically place an order less than once a month(2).
Who are online grocery shoppers?
The age profile of online grocery shoppers broadly follows the age profile of all internet shoppers, with a profile which skews largely towards the younger shopper. This is particularly the case for 25-44 year-olds, and is closely linked to the presence of children in the household(3).
The birth of children (from pregnancy to birth of first or subsequent children), and time periods when children are in the house more, such as school holidays, were increasingly seen as events which triggered a move towards online shopping(3).
The presence of children in the house can also be seen to affect the socio-economic composition of online shoppers with the presence of children in ABC1 households making it more likely that they will be online grocery shoppers, accounting for one in five online shoppers (21%) compared to 15% of all grocery shoppers.
Older shoppers are also less likely to shop online. For example, the 65+ age group accounts for more than one in five grocery shoppers in the UK, while at the same time accounting for just 13% of all online grocery shoppers – impacted largely by reduced internet use.
The future
Online grocery forecasts to 2015 (£bn)
Source: IGD research
The sector is also expected to double in size over the next five years, with total sales forecast to reach £9.9bn in 2015, growing at a CAGR of 15.3%. This will make online the fastest growing channel in UK grocery retailing. In 2015, online is set to have a 5.4% share of the UK grocery retail market in 2015, a larger share than that of the discount channel.
To date online operators have focused on home delivery services, but increasingly grocers are developing a range of delivery options to make online more convenient for customers. Tesco for instance is trialling a drive through store enabling customers to pick up orders at a time of their choosing. Sainsbury’s meanwhile is rolling out in-store ordering kiosks and collection points to its convenience store estate.
Further uptake of smartphones will also play a key role in fuelling online sales. The mobile phone will increasingly become the ‘remote control’ of consumption for society, driven by the plethora of more affordable handsets and the continued development of smartphone applications. Within a year of the launch of its ‘Ocado on the Go’ app, Ocado was already receiving more than 12% of orders through the platform, while Tesco has captured the public’s imagination with the UK’s first barcode scanning app.
Source: IGD
Sources:
(1) IGD ShopperVista, January 2011
(2) IGD Online Shopping, December 2009
(3) IGD ShopperVista Hot Topic - Online Grocery Retailing, November 2010
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