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Online grocery growth shows no sign of letting up in the EU and the US

Available now - a new RetailBulletin/ResearchFarm report, Online Grocery Retailing in 2012


Online grocery growth shows no sign of letting up in the EU and the US

Available now - a new RetailBulletin/ResearchFarm report, Online Grocery Retailing in 2012

The report looks at: Beyond m-commerce and click & collect, future models and 6 innovation ideas, finds that entirely new marketing strategies for FMCG brands have emerged, as online grocery growth shows no sign of letting up in the EU and the US.

Whilst growth for total grocery in the EU was 2.5% last year, achieved against considerable headwinds, online outpaced the sector, advancing by 22.1% in 2011. Accounting for just under 1.5% of total grocery spend in the EU right now, further strong growth is predicted for the online channel, as the leading multichannel operators and pureplays such as Amazon continue to roll out their services across the EU. However currently, very few best practise methods and benchmarks for FMCG players and retailers have been established, so there is still all left to play for in the online space.

The report focuses on the proven, successful business models, such as Tesco, the French drive operators, Amazon and some other, less well known players, as well as giving major insights into brand new reality thinking in the sector – both from established retailers, CPG companies and brand new start ups. 

One major online grocery innovation comes from Europe’s north, as Scandinavia is currently a hotbed of development. Sweden’s Linas Matkasse shoppers receive a bag with all the ingredients and recipes required to prepare 3 to 4 meals a week for their whole family.  The retailer operates a very elegant business model focusing on making busy mothers’ and fathers’ lives easier by delivering an all encompassing grocery solution. CPG players should aim to have their products featured in such offers, as the business model is increasingly being copied across the Continent. (Wal-Mart will start to offer a similar service, called Goodies next month.)

ResearchFarm predicts huge growth rates for curated shopping concepts in online grocery, as they tie in nicely with overarching consumer trends towards convenience. Similarly subscription services, which are tapping into the same consumer trend of making grocery shopping easier and providing shoppers automatically with the essentials at personalised intervals, are taking off.

In many European markets (outside the UK, France and Switzerland) the online grocery focus so far has been on shelf stable goods and health & beauty categories (with Amazon pushing this aggressively) rather than on fresh or chilled products where delivery costs can erode margins quickly. Amazon is just one player ramping up investment into this area, with consumables currently seeing the fastest growth of all its business units in the US.

As private label products share of total grocery keeps rising, keeping branded FMCG on retailers’ shelves becomes increasingly difficult. The authors of the report believe that online grocery is one area where FMCG really need to step up their marketing efforts. CPG businesses should actively partner with online grocery players, for example through funding delivery charges, if shoppers buy a certain amount of their brands, by investing in branded online store fronts on marketplaces and online grocers and by funding subscription services for example.

Even though the overwhelming majority of grocery sales will be made offline for the foreseeable future, the online sphere is where all the dynamism is.  Winning market share in offline is no mean feat, in online however it is still all to play for.
FMCG companies need to be proactively drive change in the sector now to ensure future growth and profitability.

If you would like to find out more about the report, please download the brochure

You can order the report here ( and claim an exclusive 10% discount to retailbulletin readers, by entering the code ‘bulletin’ on the check out page.

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