Online shopping: Changed habits will continue
The significant shift in shopper behaviour is an ongoing trend and the switch to online shopping continued over the summer, even when national lockdown measures ended.
A report by Waitrose.com reveals 77% of people now do at least some of their grocery shopping online compared to 61% a year ago. In addition, 60% shop for groceries online more frequently since the pandemic, with 41% citing convenience and one in five people saying they hadn’t considered it before.
The most marked increase in online grocery shopping is within the over-55 age group, where regular online shoppers have nearly trebled from 8% in 2019 to 23% in 2020.
James Bailey, Waitrose & Partners executive director, says: “Even before the pandemic, there were few retailers that wouldn’t have predicted the continued growth of ecommerce relative to physical shops. But what would have previously been a gradual upward climb in demand has – with the outbreak of Covid-19 – turned into a trajectory more reminiscent of scaling Everest.
“One in four of us now do a grocery shop online at least once a week – double the number in 2019. Because online shopping quickly becomes habitual, these changes are irreversible.”
The retailer is midway through a £100 million investment in Waitrose.com, which it predicts will account for 20% of its total business, up from 5% pre-Covid.
Within BWS, orders on Waitrose Cellar have increased by 238%, with 17% of people stating they bought more wine online during lockdown. There were two main reasons for this increase, with 22% saying they liked the fact they didn’t have to carry the wine themselves and 23% finding a wider selection of wine online compared to in store.
While Waitrose moved away from previous online partner Ocado in favour of its own online service, Marks & Spencer spotted the opportunity to enhance its online offering and it is now ramping up product lines – including plenty of BWS activity – for its Ocado launch this month.
And data provider IGD confirms the impact of Covid-19 has accelerated the shift to online sales for grocery, food and drink retailers. Online’s market share will increase from 6.1% in 2019 to 8.9% in 2022, it predicts.
IGD’s report states: “Online will be the fastest-growing channel in 2020, following dramatic increases in shopper numbers and bigger order sizes. The value of the online channel will overtake that of hypermarkets in 2020 and by 2022 online will take £1 in every £11 spent on grocery.
Simon Wainwright, director of global insight at IGD, said: “We forecast ecommerce will gain market share faster than previously predicted, following the dramatic influx of new shoppers and bigger order sizes in 2020 as a result of Covid-19. While we expect growth to pause in 2021, it will later resume, with continuing expansion from Amazon and the launch of online operations by M&S through Ocado supplementing activity by the big four.”
Alongside this, the report predicts the discount sector will become the fastest growing channel.
Wainwright said: “Though eclipsed by the surge in online sales in 2020, discount will be the fastest growing channel in 2021 and 2022 as unemployment climbs and shoppers across the income spectrum look to economise. Store network expansion will enable this growth, with smaller store formats enabling Aldi and Lidl to boost their reach into urban areas and some variety discounters scaling up their grocery operations.”
IGD also shines a spotlight on the convenience channel, which it believes will see market share increase from 21.4% in 2019 to 22% in 2022.
Wainwright said: “Having benefited significantly from meeting local needs during lockdown, growth for convenience stores will slow in 2021 and 2022.
“There is a key opportunity for stores that develop their role as destinations for local community needs going forward, but the slow recovery of trading in city centres and transient locations is likely to affect overall channel performance.”