Online Grocery Shopping Behaviour 2012

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
www.evolution-insights.com

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© Evolution Insights Ltd 2012


About Evolution Insights

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.

Our research and analysis helps • Evolution offer a range of products & services for
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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


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

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.

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.


Online Grocery Shopping: Drivers and Trends

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

Drivers and The recession has encouraged shoppers to try online
Evolving Trends in shopping over the past couple of years because many
people find it easier to plan and budget online and
UK Online
delivery model Price
– greater comparison therefore see scope to save money.
flexibility in
prices Grocery is rising
We have seen a steep rise in the use of retailer
Shopping 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
Incentives from Entry into few shops.
retailers to start market by new
shopping online players Finally we note that shoppers’ increasingly busier
Education from lifestyles continue to drive online food and grocery
retailers about penetration with convenience remaining the number
benefits of one reason why people choose to shop online.
online grocery


Online Grocery Shopping: Generation-Y

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.

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.

UK population age profile, 2012 estimate and 2015 projection:
1000
Number of people (000s)

800
600
Generation
400 s X and Y
200
0
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+
Age
2012 2015 Source: ONS, Evolution Insights


Barriers to Online Shopping: Increasing the Frequency of Online Shopping

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

Shopper ideas of how to increase frequency of online grocery shopping:
If they made the
website easier to use
Discounts/offers Being able to set a and more lifelike
A call from the supermarket saying they need
best before date so because its very hard
to substitute an item, asking a preference
that for example meat to search for some
would be useful, as would a text message
or veg isn't about to things.
saying the driver is on their way. Asda also do
expire
money off vouchers, but you can't use an in-
store voucher online or vice versa.
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?

A guarantee of fresh product
with good sell by dates
Being able to choose from the
same range as in the shops. I find
that products that are available in
A lower minimum order and Have an store are often missing from the
cheaper delivery slots interactive store 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
Definitely no from the website. Not helpful to
An option to put notes for the items Be able to track
substitutes people trying to shop online.
you want, i.e. “bacon with less fat", where the driver


The Online Grocery Shopper Context: Circumstances

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

Location and time where shoppers order their online grocery
What is interesting to note here is that 10% of
shopping shoppers order their shopping from their place
of work. What would work well here is Click &
At work – 10% Weekday - midnight-9
Collect – if shoppers were able to order their
am (or before work)
groceries at work (e.g. during lunch) and collect
Weekdays - 9 am-5pm them on their way home, this would add to the
(or during work hours) levels of convenience found in standard online
13 grocery shopping.
51 Weekdays - 5 pm-
17 3 midnight (or after
work)
Weekends

24 Weekday - midnight-9
am (or before work)

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

Weekdays - 5 pm- Online shop – 6pm
midnight (or after
work)
Weekends


Drivers of Online Grocery Shopping: Delivery

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.

I can have the delivery when it is convenient For many online shoppers (non-grocery),
to me.. 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
2012 45% 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.

The delivery charge is less than it used to be.. 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
2012 10% loyalty would go a long way in increasing the
2011 12% penetration of online shoppers.

2010 11%

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

The Online Grocery Shopper Journey: Online Journey (5)

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.

Favourites
Keyword search
Category menus
…Category menu Special Offers section
13%

25% 44%
31%

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


Methodology

www.evolution-insights.com 13

Methodology

• Evolution carried out a preliminary survey of
Evolution’s methodology 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
Secondary and desk Preliminary qualitative and
features, functionality and initiatives. Initial
research quantitative research
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
Detailed accompanied determine overall penetration rates, barriers
shops, including pre- and to online food and grocery retailing and
post-shop in-depth Main quantitative surveys offline retailers used. The second survey
interviews & Remote included only shoppers who shop for food
Moderated Usability Test 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,
Insights news and industry resources. Evolution’s
consultants also maintained close
relationships with industry figures across
retailers and manufacturers.

Methodology: quantitative research - survey

Topics of questions in quantitative survey

Demographic profiling • Detailed shopper insights were gained
from two surveys - one of 1,665 UK adults
who say they regularly shop for food and
Frequency of online grocery shopping grocery, the other of 1,007 UK adults said
they shopped online at least occasionally.
Reasons / barriers for online grocery shopping
The first sample was fully representative
of the UK population who regularly shop
for food & grocery, while the second was
Online retailer usage in terms of frequency and most regular fully representative of the online grocery
shopper population in the UK.
Drivers of store choice • The survey contained 27 questions
relating to topics outlined to the left – in
addition to standard demographic
Offline retailer usage in terms of frequency and most regular
profiling questions.

Missions in terms of frequency and most regular • The questions were designed to give
maximum insight into shopper’s
motivation and behaviour before, during
Circumstances, approach and modality while shopping online and after online grocery shopping.

Dislikes with online grocery shopping

Barriers to increased frequency

Source: Evolution Insights


Glossary

www.evolution-insights.com 16

Glossary

3G – Third generation mobile phone network capable of improved data connectivity Main trolley mission - Main household shops, usually planned covering most
categories. Often at weekend.
2G – Second generation (GSM) mobile phone network technology M-commerce - buying and selling of products or services over mobile electronic
ABC1C2DE – Socio demographic profile using job type (if applicable). systems such as the smartphones
Above the line (ATL) – Advertising using the main 5 media types of television, press, Mental budget - An often subconscious budget most shoppers possess before and
during a shopping trip, which influences overall and individual item spend.
radio, cinema, and posters to promote brands.
Microsite – Internet website dedicated to a particular brand, using a different
App – A smartphone application (branded) URL
Approach – the way a shopper typically builds their online shopping basket Modality – The way a shopper behaves in-store.
BBE date – Best before end date Online journey – See journey.
On-the-go – Buying any food and/or drink for immediate consumption, i.e. outside the
Below the line (BTL) – Advertising using non-media communication. Typically sales home
promotions as short-term incentives, largely aimed at consumers in-store. Personalisation – Targeting of marketing campaigns to individuals based upon
Big Four – The largest four grocer retailers in the UK by market share. detailed information about their demographic and shopping habits
Category driver – key influences driving the growth of any given category POP – Point of purchase
POS – Point of sale
Channel – Retail distribution type for example supermarket, c-store, CTN
POS Material– Marketing communications at the point of sale.
Circumstances – The circumstances of the shopper when and where they undertake Push delivery – delivery where content is sent to the recipient without their
their shop interaction at the time of delivery
Demographic – Characteristics of the population (including sex, race, age and Pull delivery – delivery where content is requested by the recipient reactively.
income). QR code – Quick response code (new form of 2D barcode that carries more
information)
Digital media – digital marketing medium for example social media, mobile, digital
Revenue – Total reported turnover (excluding VAT).
signage.
ROI – Return on investment
Digital shopper marketing – Shopper marketing that utilises digital media Shopper context – Evolution’s model for determining the profile of an individual
DSM – Digital shopper marketing shopper.
EAN – European Article Number (barcode standard) Shopper marketing – Any marketing activity aimed at the shopper throughout their
path to purchase.
E-commerce - buying and selling of products or services over electronic systems such Shopper mission – the reason/purpose of the shopping trip from the shopper’s
as the Internet and other computer networks perspective.
ePOS – electronic point of sale system, e.g. checkout technology Smartphone – An internet enabled mobile phone device that runs applications
(‘apps’).
e-retailer/e-tailer – a retailer which trades online.
SMS – Short message service (mobile text messaging)
EDLP – Everyday low prices. Socio-demographic - Characteristics of the population (including sex, race, age and
Favourites – a feature of some online food and grocery retailers that allows shopper income).
to access a list of products they have bought in the past, most often or most recently. Social network – electronic social interaction platform for example Facebook, Twitter
FMCG – Fast moving consumer goods, often used to refer to a manufacturer. Stock up mission - Planned, infrequent and typically high volume. Typically once a
month
Food and grocery - Foodstuffs and various household supplies Top-up - A shopping mission to buy food and grocery for the home in between the
Gondola end - The promotional position at the end of a main aisle. main household shop. It excludes food and drink on the go, newsagent products and
takeaways
GPS – global positioning system (technology incorporated into mobile devices for
URL – Uniform resource locator (web standard for internet website addressing)
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.

Contact us

Evolution Insights Ltd

Prospect House
32 Sovereign Street
Leeds
LS1 4BJ

Telephone: 0113 336 6035

e-mail: craig.bradley@evolution-insights.com

Web: http://www.evolution-insights.com
Company No. 07006001
Country of Incorporation: United Kingdom


Online Grocery Shopping Behaviour 2012

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