New research published by the UK Cards Association, which suggests that online grocery retailers and brands are not achieving their fair share of Internet shopping versus other sectors, could be something of a wake-up call to FMCG brands and retailers if they want to make online an even more lucrative channel and attractive proposition for shoppers.
That’s the message from category and shopper management specialist, Bridgethorne, after the research, which showed that although some 41% of in-store card purchases were on food and drink, only 7% were via the Internet. And this was despite the research showing that online shoppers in the UK spend more per household than consumers in any other country.
The entertainment sector, including cinema and concert tickets, takeaway orders and music downloads, accounted for one in four online card purchases in the UK, whilst more than a quarter (27%) of what was spent online was in financial services, including insurance renewals and online banking.
The importance of capitalising on the online grocery opportunity is highlighted on in a 2016 report from InternetRetailing that reported 49% of shoppers using click-and-collect more now than they did a year previously, and from Mintel in April 2016, which showed that 29% of UK online grocery shoppers were shopping for their groceries more online than 12 months earlier. It was forecasting online sales would grow to reach £15 billion by 2020, whilst acknowledging that online grocery shopping accounted for just 6% of total grocery sector sales in 2015, albeit up from 3% in 2010. In its report Mintel said that just under half (48%) of Britons were current online grocery shoppers, with 11% doing all of their grocery shopping online, with a further 12% doing most of their grocery shopping online.
“Bridgethorne’s own shopper research has already shown that the pre-family and younger families are clearly more disposed to eCommerce, which is something likely to underpin accelerated online activity as that generation gets older and new ones emerge,” explains Nick Kirby, Bridgethorne’s Shopper, Ecommerce & Analytics Director.
Kirby adds, “However, there is still more that brands and retailers could be doing to optimise their ‘digital shelves’ and encourage more shoppers online and increase product conversion. Getting your digital shelf right not only impacts on online sales but also offline sales via the halo effect of ecommerce. Every 5.8% of sales online will deliver an estimated further 7% of sales offline.”
Kirby argues that by fully auditing digital shelf activation across all SKUs and all key online retailers, brands will identify opportunities to optimise their online offering and improve shopper engagement.
“The currency that brands need is actionable insights that will help improve their ecommerce performance. This means identifying gaps in the market as well as their own offering so they can gain a competitive advantage, move towards a position where they can, in effect, become ‘eCaptains’ within their categories as a way of working with retailers to stimulate and deliver on shopper needs.”