Online Grocery Shopping Behaviour 2012

www.evolution-insights.com

Online Food & Grocery: The Shopper Perspective 2012 SAMPLE EXTRACT Essential insight into shopper motivation and behaviour in UK food and grocery online

Evolution Insights Ltd Prospect House

32 Sovereign Street Leeds

LS1 4BJ Tel: 0113 389 1038

http://www.evolution-insights.com

Disclaimer


Please note No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Evolution Insights Ltd. The content of this report is based on information gathered in good faith from both primary and secondary sources and is believed to be correct at the time of publication. Evolution Insights can however provide no guarantee regarding the accuracy of this content and therefore accepts no liability whatsoever for any actions taken that subsequently prove incorrect. © Evolution Insights Ltd 2012

• Evolution offer a range of products & services for clients in the field of shopper research:-

• Off-the-shelf research

– Evolution’s off the shelf research publications deliver affordable insight into shopper motivation and behaviours in UK food, drink and grocery

• Insight Plus

– Insight Plus offers your business the opportunity to engage in any of our regular shopper research projects in advance of publication, tailoring the scope to suit your needs

• Bespoke Consulting

– As publishers of research, we are able to draw upon a wealth of existing proprietary data for consulting projects – helping to better inform and shape any further research requirements.

Evolution is a leading research consultancy specialising in shopper motivation and behaviour. We deliver off-the-shelf, tailored and bespoke research for manufacturers, retailers and agencies.

Further information is available at our website http://www.evolution-insights.com

Visit and sign up for Reflections, our free quarterly newsletter offering analysis and commentary on topical issues

About Evolution Insights

As a leading publisher of shopper research, we are ideally placed to offer your business actionable shopper insight.

Our research and analysis helps clients develop targeted shopper marketing initiatives designed to influence shoppers at the point of purchase.

We use a range of research methodologies to discover genuine insights. Our research incorporates a broad spectrum of robust qualitative and quantitative research techniques.


Contents


Key Findings and Summary 6 Circumstances 36 Approach to Online Grocery Shopping 38

Online Grocery Shopping: Definition & Market 9 Planning 39 Definition 10 Shopper Missions 40 Online grocery shopping in the UK 11 Summary 42 The Market 12

Retailer Choice 43 The Rise of Internet & Smartphones 13 Introduction 44 Drivers and Trends 14 Shoppers’ Primary Retailer Share 45 Generation-Y 15 Drivers of Store Choice, by Retailer 46 UK Internet Use 16 Using Multiple Retailers 47 Smartphones 17 Online Retailer Penetration, by Offline Retailer 48 M-commerce 18 Non-standard Retailers 49 Social Media 19 Summary 50

The Online Grocery Shopper: At a Glance 20 Delivery 51 Introduction 21 Introduction 52 Penetration and Frequency 22 Drivers of Online Grocery Shopping 53 Demographic Profile 23 Barriers to Online Shopping for Online Shoppers 54 Frequency, by online retailer 25 Barriers to Online Shopping for Non-Online Shoppers 55 Frequency Online vs. Offline 26 Shoppers’ Ideas for Improvement 56 General Dislikes 27 Drivers of Store Choice 57 Shoppers’ Ideas for Improvement 28 Summary 58 Increasing the Frequency of Online Shopping 29 Summary 30 Saving Money 59

Introduction 60 The Online Grocery Shopper: Context 31 Drivers of Online Grocery Shopping 61 Introduction 32 General Dislikes & Drivers of Store Choice 62 A Framework 33 Managing Budget 63 Shopper Segmentations 34 Multi-buys and Pack Sizes 64

Contents


Comparison Sites 65 Starting Point 91 Impulse Purchasing 66 Touch Points 92 Summary 67 Online Journey 93

Ordering Results 98 Personal Situations 68 Summary 99 Introduction 69 Drivers of Online Grocery Shopping 70 Methodology 100 Drivers & Barriers to Online Grocery Shopping 71 Click & Collect 72 Glossary 103 Summary 73

Retailer Websites 74 Introduction 75 Drivers of Online Grocery Shopping 76 Barriers to Online Grocery Shopping 77 Shoppers’ Ideas for Improvement 78 Drivers of Store Choice 79 Summary 80

Products 81 Introduction 82 Dislikes of Online Shopping 83 Barriers to Online Grocery Shopping 84 Shoppers’ Ideas for Improvement 85 Drivers of Store Choice 86 Summary 87

Online Journey 88 Introduction 89 Definition 90

Despite a lag in internet penetration behind other European and Asian countries, the UK has one of the most advanced online grocery markets in the world. It is estimated that online sales currently account for 3.5% of the total grocery sales in the UK, which is totalling approximately £158bn (around £6bn online, end 2012). The proportion of online sales is estimated to double in the next few years with a prediction of around 6% in 2016.

Although online grocery sales are increasing, the channel is still in its relative infancy and remains comparatively small compared to alternative channels of shopping. However, with increasing internet penetration, improved broadband and retailer sites, and higher awareness and confidence in online shopping, there is no reason this cannot increase. With more shoppers considering online shopping a way to save time, money and hassle, we can see more and more shoppers turning to the internet.

With a new generation of shoppers emerging that are have grown up in a digital -age, ecommerce is likely to increase. This new batch of shoppers have grown up with the internet and will likely have no problem buying their food online as they would with other items.

Most of the leading retailers in the UK that have an online presence are developing mobile websites and apps to make grocery ordering easier and more accessible. Such innovations should keep the UK in the forefront of online grocery shopping for some years to come.

The food and grocery market in the UK is arguably one of the most sophisticated online grocery markets in the world. Sales are up each year with double digit year-on-year growth.

Online Food and Grocery Shopping: Online grocery shopping in the UK


Growth in internet and broadband penetration

Broader growth in e-commerce

Price comparison

is rising

Entry into market by new

players

Education from retailers about

benefits of online grocery

Incentives from retailers to start shopping online

Evolving delivery model

– greater flexibility in

prices

Busier lifestyles driving

convenience

Internet and broadband penetration continues to rise and as a consequence the potential audience of online grocery shoppers is increasing too. Strong growth in e-commerce and online shopping (outside of food and grocery) will likely translate into growth in online food and grocery sales over the next few years as increasingly savvy online shoppers try new things.

The recession has encouraged shoppers to try online shopping over the past couple of years because many people find it easier to plan and budget online and therefore see scope to save money.

We have seen a steep rise in the use of retailer incentives over recent times. Free delivery offers remain popular with new and existing shoppers alike but there has been a strong increase in the number of ‘money-off first online shops’ - or indeed the first few shops.

Finally we note that shoppers’ increasingly busier lifestyles continue to drive online food and grocery penetration with convenience remaining the number one reason why people choose to shop online.

Here we identify and discuss the current drivers of online food and grocery shopping. Over the subsequent pages in this chapter we then assess in more detail some of the innovations and trends which are set to shape the market over the next few years.

Online Grocery Shopping: Drivers and Trends


Drivers and

Trends in

UK Online

Grocery

Shopping

Over the next few years we will witness an important demographic shift which looks set to boost interest and usage in online grocery shopping. The so-called Generation Y age group i.e. the ‘digital natives’ – characterised by the fact they have grown up with the internet and are among the most tech-savvy shoppers there are – are forming households, families, and are starting to take food and grocery shopping seriously. As they settle into jobs and move out on their own, they will become the first generation of grocery shoppers that are completely comfortable shopping over the internet.

Unlike older shoppers this generation do not have a habitual attachment to supermarkets and are fully au fait with the concept of buying goods over the Internet. We expect that marketing efforts to attract Gen Y’ers onto online grocery sites will prove increasingly effective.

We anticipate this will have interesting implications over the next few years in terms of shoppers’ appetite for improved digital media and social networking. These topics are discussed over the next few pages.

Having grown up with the internet and modern technology, generation Y are becoming an increasingly large group of food and grocery shoppers. Their familiarity with the internet and concepts like social networking not only make them more likely to try online shopping but also more likely to use media-rich and social networking features.

Online Grocery Shopping: Generation-Y


0

200

400

600

800

1000

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+Nu

mb

er o

f p

eop

le (

00

0s)

Age 2012 2015

UK population age profile, 2012 estimate and 2015 projection:

Source: ONS, Evolution Insights

Generations X and Y

We look here at some ideas from current online shoppers of initiatives that would encourage them to shop online for groceries more frequently.

Barriers to Online Shopping: Increasing the Frequency of Online Shopping


Shopper ideas of how to increase frequency of online grocery shopping:

A call from the supermarket saying they need to substitute an item, asking a preference would be useful, as would a text message

saying the driver is on their way. Asda also do money off vouchers, but you can't use an in-

store voucher online or vice versa.

A guarantee of fresh product with good sell by dates

Discounts/offers

A lower minimum order and cheaper delivery slots

An option to put notes for the items you want, i.e. “bacon with less fat",

Be able to track where the driver

Being able to choose from the same range as in the shops. I find that products that are available in store are often missing from the

website. When I queried this with the store I was told it was because no-one had ordered the products

recently so they were removed from the website. Not helpful to

people trying to shop online.

Being able to set a best before date so

that for example meat or veg isn't about to

expire

Definitely no substitutes

Have an interactive store

If they made the website easier to use

and more lifelike because its very hard

to search for some things.

Sometimes I don't know what x kgs of a product is without seeing it. i.e. is 5kg of bananas 3 items or 10 items?

1 3 5 1 3

24

45

17

Weekday - midnight-9am (or before work)

Weekdays - 9 am-5pm(or during work hours)

Weekdays - 5 pm-midnight (or afterwork)Weekends

Weekday - midnight-9am (or before work)

Weekdays - 9 am-5pm(or during work hours)

Weekdays - 5 pm-midnight (or afterwork)Weekends

We can see here that the vast majority of shoppers (9/10) order their groceries from home, in particular on a weekday evening.

The Online Grocery Shopper Context: Circumstances


Location and time where shoppers order their online grocery shopping

At work – 10%

What is interesting to note here is that 10% of shoppers order their shopping from their place of work. What would work well here is Click & Collect – if shoppers were able to order their groceries at work (e.g. during lunch) and collect them on their way home, this would add to the levels of convenience found in standard online grocery shopping.

Online shop – 6pm

The delivery has always been one of the biggest drivers and barriers to online grocery shopping. Almost half of online shoppers say that choosing a delivery time is a driver to online shopping.

Drivers of Online Grocery Shopping: Delivery


Base = UK adults who say they shop for food & grocery regularly and shop online for food & grocery at least occasionally, n=1007.

The delivery charge is less than it used to be..

2012 10% 2011 12% 2010 11%

I can have the delivery when it is convenient to me..

2012 45%

For many online shoppers (non-grocery), delivery times are a source of anguish that discourage many from buying online. The chance of missing a delivery and having to re-arrange, or collect from an inconvenient location is tiresomeness. The fact that grocery retailers allow you to choose a convenient time slot is important to online shoppers. As we will see later, amendments to time slots to make them more specific as posed as improvement ideas by online shoppers.

As we can see, the delivery charges aren’t a driver to online grocery shopping. Only 1 in 10 think that the charge is less than it used to be. Lowering delivery charges or creating offers for loyalty would go a long way in increasing the penetration of online shoppers.

Here we can see the shopping styles of those that start by looking through the category menus. For example, around 2/5 will then look in the special offers section.

The Online Grocery Shopper Journey: Online Journey (5)


13%

31% 44% 25%

41% 59% 51% 49% 55% 45%

…Category menu

Favourites Keyword search Category menus Special Offers section

Methodology

13 www.evolution-insights.com

Secondary and desk research

Preliminary qualitative and quantitative research

Main quantitative surveys

Detailed accompanied shops, including pre- and

post-shop in-depth interviews & Remote

Moderated Usability Test

Insights

• Evolution carried out a preliminary survey of 100 shoppers, to test questions for the main survey and establish an initial view of market penetration. Detailed online store audits were also completed, to facilitate awareness and commentary of online grocery retailer features, functionality and initiatives. Initial insights gained were used to help further design the main survey.

• Two quantitative surveys were utilised in this report. The first was part of a wider research programme and had a sample of 1,665 UK adults who said they regularly shop for food & grocery. This survey was used to determine overall penetration rates, barriers to online food and grocery retailing and offline retailers used. The second survey included only shoppers who shop for food and grocery online at lease occasionally. This sample of 1007 completed all questions relating to their online shopping behaviour.

• Comprehensive and detailed assessment of all the data received was then used to discover insights. Throughout this process, primary research was supported by secondary research drawing on Evolution’s proprietary databases, national statistics, news and industry resources. Evolution’s consultants also maintained close relationships with industry figures across retailers and manufacturers.

Methodology


Evolution’s methodology

• Detailed shopper insights were gained from two surveys - one of 1,665 UK adults who say they regularly shop for food and grocery, the other of 1,007 UK adults said they shopped online at least occasionally. The first sample was fully representative of the UK population who regularly shop for food & grocery, while the second was fully representative of the online grocery shopper population in the UK.

• The survey contained 27 questions relating to topics outlined to the left – in addition to standard demographic profiling questions.

• The questions were designed to give maximum insight into shopper’s motivation and behaviour before, during and after online grocery shopping.

Methodology: quantitative research - survey


Source: Evolution Insights

Barriers to increased frequency

Dislikes with online grocery shopping

Circumstances, approach and modality while shopping online

Missions in terms of frequency and most regular

Offline retailer usage in terms of frequency and most regular

Drivers of store choice

Online retailer usage in terms of frequency and most regular

Reasons / barriers for online grocery shopping

Frequency of online grocery shopping

Demographic profiling

Topics of questions in quantitative survey

Glossary

16 www.evolution-insights.com

Glossary


3G – Third generation mobile phone network capable of improved data connectivity

2G – Second generation (GSM) mobile phone network technology

ABC1C2DE – Socio demographic profile using job type (if applicable).

Above the line (ATL) – Advertising using the main 5 media types of television, press, radio, cinema, and posters to promote brands.

App – A smartphone application

Approach – the way a shopper typically builds their online shopping basket

BBE date – Best before end date

Below the line (BTL) – Advertising using non-media communication. Typically sales promotions as short-term incentives, largely aimed at consumers in-store.

Big Four – The largest four grocer retailers in the UK by market share.

Category driver – key influences driving the growth of any given category

Channel – Retail distribution type for example supermarket, c-store, CTN

Circumstances – The circumstances of the shopper when and where they undertake their shop

Demographic – Characteristics of the population (including sex, race, age and income).

Digital media – digital marketing medium for example social media, mobile, digital signage.

Digital shopper marketing – Shopper marketing that utilises digital media

DSM – Digital shopper marketing

EAN – European Article Number (barcode standard)

E-commerce - buying and selling of products or services over electronic systems such as the Internet and other computer networks

ePOS – electronic point of sale system, e.g. checkout technology

e-retailer/e-tailer – a retailer which trades online.

EDLP – Everyday low prices.

Favourites – a feature of some online food and grocery retailers that allows shopper to access a list of products they have bought in the past, most often or most recently.

FMCG – Fast moving consumer goods, often used to refer to a manufacturer.

Food and grocery - Foodstuffs and various household supplies

Gondola end - The promotional position at the end of a main aisle.

GPS – global positioning system (technology incorporated into mobile devices for geographic location identification and tracking)

Impulse – A sudden wish or urge that prompts an unplanned act or feeling.

Journey - the path of the shopper through the website.

Main trolley mission - Main household shops, usually planned covering most categories. Often at weekend. M-commerce - buying and selling of products or services over mobile electronic systems such as the smartphones Mental budget - An often subconscious budget most shoppers possess before and during a shopping trip, which influences overall and individual item spend. Microsite – Internet website dedicated to a particular brand, using a different (branded) URL Modality – The way a shopper behaves in-store. Online journey – See journey. On-the-go – Buying any food and/or drink for immediate consumption, i.e. outside the home Personalisation – Targeting of marketing campaigns to individuals based upon detailed information about their demographic and shopping habits POP – Point of purchase POS – Point of sale POS Material– Marketing communications at the point of sale. Push delivery – delivery where content is sent to the recipient without their interaction at the time of delivery Pull delivery – delivery where content is requested by the recipient reactively. QR code – Quick response code (new form of 2D barcode that carries more information) Revenue – Total reported turnover (excluding VAT). ROI – Return on investment Shopper context – Evolution’s model for determining the profile of an individual shopper. Shopper marketing – Any marketing activity aimed at the shopper throughout their path to purchase. Shopper mission – the reason/purpose of the shopping trip from the shopper’s perspective. Smartphone – An internet enabled mobile phone device that runs applications (‘apps’). SMS – Short message service (mobile text messaging) Socio-demographic - Characteristics of the population (including sex, race, age and income). Social network – electronic social interaction platform for example Facebook, Twitter Stock up mission - Planned, infrequent and typically high volume. Typically once a month Top-up - A shopping mission to buy food and grocery for the home in between the main household shop. It excludes food and drink on the go, newsagent products and takeaways URL – Uniform resource locator (web standard for internet website addressing)

Contact us

Evolution Insights Ltd

Prospect House 32 Sovereign Street

Leeds LS1 4BJ

Telephone: 0113 336 6035

e-mail: [email protected]

Web: http://www.evolution-insights.com

Company No. 07006001

Country of Incorporation: United Kingdom


Online Grocery Shopping Behaviour 2012

Documents

Transcript of Online Grocery Shopping Behaviour 2012