Online report 2013 sample extract


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Remarkable growth within the UK’s online food & grocery market over the past few years has resulted in a large number of regular grocery shoppers using the online channel as well as their regular supermarket shop. Every increasing internet penetration and greater confidence in online shopping in general are pushing this growth, as well as increasing efforts by individual retailers to encourage shoppers to go online. Predicted growth of the online channel far outweighs that of the food & grocery market as a whole, and will continue to do so as shoppers continue to mix the channels they use for their food & grocery shop.

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Online report 2013 sample extract

  1. 1. Evolution Insights: Shopper Insight Series Online Food & Grocery: The Shopper Perspective 2013 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 1
  2. 2. 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 2013 2
  3. 3. 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 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. As a leading publisher of shopper research, we are ideally placed to offer your business actionable shopper insight. Sign up for Shopper Trend Report, our free monthly newsletter offering analysis and commentary on topical shopper issues. 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 3
  4. 4. Contents Key Findings & Summary 6 The Online Grocery Shopper: At a Glance Introduction UK Grocery Market Predictions Timeline 2012-2013 Key Drivers & Trends Penetration and Frequency Demographics The Off-line Shopper Summary 9 10 11 13 14 15 16 17 18 19 The Online Grocery Shopper: Retailer Choice Introduction Tesco Asda Sainsbury’s Morrisons Waitrose Ocado Amazon Online Shopper Profile, by Retailer Drivers of Store Choice, by Retailer Online Retailer Penetration, by Offline Retailer Drivers Summary 20 21 23 24 25 26 27 28 29 30 31 32 33 34 35 The Online Grocery Shopper: Shopping Habits Introduction Key Drivers & Trends Circumstances Planning Starting Point Planning & Starting Points, Demographics Ordering Results Touch Points Shopper Missions Spend Delivery Changing Habits Summary 36 37 38 39 41 42 43 44 45 47 48 49 50 52 The Online Grocery Shopper: Drivers & Trends Introduction Key Drivers & Trends Delivery Charges Click & Collect Recipe Boxes Opinions on Delivery & Substitutions Opinions on Delivery & Substitutions, by Retailer Abandoning Online Shopping Carts Customer Reviews New Products Drivers to Online Shopping Barriers to Online Shopping 53 54 55 59 60 61 62 63 65 66 67 68 69 4
  5. 5. Contents Shoppers’ Positives of Online Shopping Shoppers’ Negatives of Online Shopping Summary 70 71 72 The Online Grocery Shopper: Online Categories Introduction Categories Shoppers Don’t Like to Buy Online Fruit & Veg Meat Dairy Summary 73 74 75 76 77 78 79 The Online Grocery Shopper: Typologies Shopper Segmentations Demographics Retailer 80 82 83 84 Methodology 85 5
  6. 6. The Online Grocery Shopper: UK Grocery Market The UK food & grocery market is continuing to rise year-on-year, but at a slower rate as the market becomes increasingly saturated. There is great potential to increase the frequency of online shops within those who already shop online in order to increase sales. UK online food, drink and grocery market expenditure estimates (2006-2013f): 7.0 40 37 6.0 6.7 35 5.6 30 5.0 4.0 3.0 3.0 2.0 30 4.9 20 3.6 25 4.2 20 20 2.3 35 17 17 1.7 14 15 10 1.0 5 0.0 Year-on-year growth (%) Expenditure estimates (£billion) 8.0 0 2006 2007 2008 2009 2010 2011 2012 2013F 6
  7. 7. The Online Grocery Shopper: Predictions 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 Reports predict that online retail is set to grow by almost 50% over the next five years to be worth over £50bn It is expected that in 2018, one pound in every seven spent on retail will be made online A key driver in the growth of online shopping is it’s enjoyableness. Shoppers are largely rating online shopping as more enjoyable than traditional in-store shopping It is likely that online F&G sales will grow quicker than the overall F&G market in the next few years The growth in penetration of smartphones and tablets has allowed for the evolution of ‘second screening’. Shoppers no longer have to be tucked away in a separate room with a PC to shop in their homes – they can shop whilst watching TV with the rest of the family 7
  8. 8. The Online Grocery Shopper: Timeline 2012-2013 As the online grocery market is estimated to dramatically increase in value to £11bn by 2018, supermarket giants battle to take market share and remain at the forefront of shopper’s minds. The timeline pictured below highlights the key online food and grocery developments of 2013. Aldi reveals plans to launch an online liquor store in Australia, in an attempt to take market share from Tesco, Sainsbury's and Waitrose benefitted Woolworth’s. greatly from the festive period, as Tesco Morrison’s and Ocado do a trial run of the announces a 1.8% increase in sales. Morrison’s and supermarkets new online store which launches in Waitrose thanks the popularity of tablets Ocado enter a 25 2014. for its success as 22.8% of festive orders year (£200m) Iceland considers trading were made via the platform. partnership. online in order to rival Morrison’s. Dec Jan Feb Tesco makes online delivery more efficient by installing automated picking machines , in selected dark stores. March April Tesco Lotus commences its online delivery service in Shanghai and Bangkok. May June Brewer AB inbev aim to improve their ecommerce strategy using social media. By clicking on Facebook/ Pinterest ads beer can be added to online shopping baskets. July August September October Forecasters predict that online sales will double in the next five years. Asda expands click and collect to better suit the needs of commuters. Lockers are now available in strategic locations Sainsbury’s online saw such as Universities . sales of £1bn for the first time. Amazon Fresh trials its delivery service in California, LA. Depending on the success of the trial; the company is expected to enter the UK grocery market.
  9. 9. Retailer Choice Over the next few pages we take a look at the market share by individual retailers. The pages will look a little something like this… Overall and Online Market Share 30.2% Overall 37.1% Online Please note that the online market share stated on these pages is not the same as the shopper share that we look at on P30. Shopper share takes into account the proportion of shoppers that use that store as their main online retailer and not the market share of that retailer. 9
  10. 10. Retailer Choice: Drivers of Store Choice, by Retailer They offer the best value for me/are the cheapest They have the best promotions They have the most suitable delivery times for me They have the cheapest delivery Their produce tends to be the freshest/best quality Their website is the easiest to use and understand Their range is better than the rest They don't send product substitutes as much as their competitors Because they are the same company as the supermarket I usually use They have my favourites list It's the only one I've ever considered Average 44 72 25 16 49 34 42 28 20 37 26 30 30 36 30 21 29 15 18 24 14 14 38 47 24 30 26 22 22 29 20 13 32 33 24 8 9 13 33 12 24 19 23 9 23 19 10 13 7 16 8 5 8 2 8 Highlighted numbers indicate a large deviation from the average 10
  11. 11. Shopping Habits: Circumstances (2) 14% of shoppers have their order delivered to their place of work. Here we an see the majority have delivery between 5pm-midnight on a weekday. Location and time where shoppers have their online grocery shopping delivered At work – 14% 15 35 3 5 5 Understanding when shoppers choose to have their items delivered is important for retailers who can distribute their resources appropriately. 1 4 32 Weekday – midnight9am Weekdays – 9am-5pm Weekdays – 5pmmidnight Weekends 11
  12. 12. Shopping Habits: Changing Habits We look here at perceived changing habits of online shoppers. If shoppers predictions are right, online shopping will continue to grow into 2014, with 1/3 thinking they will shop online more next year than they currently do. Now, compared to last year Next year, compared to now 61 51 43 33 6 6 Shop online Shop online the Shop online more same less Shop online Shop online the Shop online more same less 12
  13. 13. Drivers & Trends: Opinions on Delivery & Substitutions With many online retailers offering services such as delivery tracking/alerts, it is not surprising to see a large proportion saying that they would like to have this option for their grocery delivery. 79% Would like to receive an alert to say that their delivery is on its way (e.g. text) 72% Know the returns policy prior to making an order 56% Have returned grocery items in the past 67% Would like tracking information on their delivery 53% have had a delivery in the past that has been late 60% Are often sent substitute products 32% Would pay more to get a faster delivery 13
  14. 14. Online Categories: Fruit & Veg Fruit & Veg 56 I like to choose my own 21 I don’t think it’ll arrive fresh Worried about them being damaged during delivery 6 Other 6 Bad past experience Have local shop that is cheaper 5 I don’t buy this category I like to feel the quality in my hand It is too difficult to choose between them online 3 It’s hard to tell the size online/understand the… On several occasions I have received poor quality fruit and vegetables 2 I like to read the label/packaging 1 I worry it won’t stay at the right temperature 0 0 I shop locally for it fresh 10 20 30 40 50 60 14
  15. 15. Typologies: Shopper Segmentations Evolution’s extensive research into online shopping behaviour has allowed us to segment shoppers into varying shopping styles. It is of course possible for individual shoppers to change as their circumstances change, but we believe it is useful to understand different modalities based on differing circumstances. Special Offer Junkie – Shoppers whose first thought is to look at the special offers section, and to seek out special offers within other sections. Speed Freak – Pre-plans the majority of items and goes straight to them with little browsing. Relaxed Browser – Generally enjoy online shopping and take their time to browse all sections and results. Frustrated Technophobe – Not the best at using technology and often struggle to find the items they want. Find it a frustrating experience. Creature of Habit – The main items bought tend not to differ between shops. Most items are bought from the favourites section. 15
  16. 16. Evolution Insights: Shopper Insight Series This presentation is a Sample Extract. Full Report 87pages. For Details on the full report please contact Evolution Insights Ltd Prospect House 32 Sovereign Street Leeds LS1 4BJ Tel: 0113 389 1038 SAMPLE EXTRACT
  17. 17. Methodology 17
  18. 18. Methodology Evolution’s methodology Secondary and desk research Detailed accompanied shops, including pre- and post-shop in-depth interviews & Remote Moderated Usability Test Preliminary qualitative and quantitative research Main quantitative surveys • 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 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 1000 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. Insights 18
  19. 19. Methodology: Quantitative Research – Survey Topics of questions in quantitative survey • Detailed shopper insights were gained from 1,000 UK adults said they shopped online at least occasionally. The questionnaire was fully representative of the online grocery shopper population in the UK. Demographic profiling Frequency of online grocery shopping Barriers for non- online grocery shoppers Online retailer usage in terms of frequency and most regular • The survey contained 27 questions relating to topics outlined to the left – in addition to standard demographic profiling questions. Drivers of store choice • The questions were designed to give maximum insight into shopper’s motivation and behaviour before, during and after online grocery shopping. Context of online shop Missions in terms of frequency and most regular Circumstances, approach and modality while shopping online Delivery, substitutes and spend Categories NOT shopped online Source: Evolution Insights 19