Consumer Trends in Online Grocery Retail

The COVID-19 pandemic changed the way consumers shop for groceries. Unsurprisingly, there was a huge uptick in people shopping for groceries online, either out of necessity or due to safety concerns. As a result, there was a significant boost to the size of the online grocery market across Europe. In the UK, the market increased by a massive 88% between 2019 and 2021, and there were smaller, albeit still impressive, rates of growth across the other big five European markets: France, Germany, Spain and Italy.

Naturally, as the pandemic has faded and restrictions have been lifted many shoppers have eschewed online retail and returned to shopping in-store. Nevertheless, online grocery sales still remain than pre-pandemic numbers, and the market on the whole looks healthy. However, a new challenge has emerged in recent times: the cost-of-living crisis.

Overall, increased cost of living and rising inflation have caused food prices to go up. Needless to say, this is having an impact on both the grocery and online grocery retail markets. But, arguably, it is a bigger challenge for online grocery retailers, as consumers who continue to shop online also face the added expense of delivery charges, something over a third of French online grocery shoppers consider a non-essential cost.

Many people are switching back to in-store shopping as a way to cut costs. Not just to save on the aforementioned delivery costs, but also because a number of consumers believe that they can find better prices and promotions in-store. Indeed, a third of UK consumers avoid using online grocery shopping for this very reason.

But it’s not all doom and gloom. There are many consumers, particularly young people and families with young children, who think that paying a delivery charge is more than acceptable when considering the time saved. This speaks to a wider trend that is causing Europeans to stick with online grocery shopping: it’s all about convenience.

During times of financial hardship, value is at the forefront of most shoppers’ minds. But it should be remembered that value comes in many forms, not just low prices. To keep consumers coming back, retailers need to demonstrate the innate value in aspects of their online service beyond price, starting with convenience.

In the UK, the leading reasons why shoppers use the online channel for groceries are all convenience driven. Two-fifths of UK consumers use online shopping to avoid shopping in-store (a remnant habit from the pandemic), and over a third go online to avoid having to transport items themselves. We have seen a similar behaviour in France. As previously alluded to, younger shoppers cited convenience as a significant driver to shopping online, with 79% of 16-34 year olds saying that the time saved makes paying a delivery charge acceptable.

Over a quarter of Brits who shop online for groceries do so in order to bulk-buy items, as this means they will not have to experience the inconvenience of transporting heavy items home themselves. Bulk-buying is a behaviour that has been growing in popularity. In 2022, over a third of UK grocery shoppers said they had stocked up on a particular product when it was at a low cost as a response to the rising cost of living. Retailers should draw more attention to online grocery’s suitability when it comes to bulk-buying behaviours to establish convenience and value.

Loyalty schemes in retail are already highly popular, with four fifths of UK shoppers holding a membership with at least one retailer. This popularity extends to online retail. Now more than ever, loyalty and subscription schemes can be a powerful tool for online grocery retailers to challenge the perception that shopping online costs more. Through discounts and rewards, they can be pitched to consumers as a way to save money. As previously mentioned, delivery charges can be a barrier for shoppers in terms of additional cost, and schemes like delivery passes can ease concerns in this area.

As seen in Mintel’s Global Outlook on Sustainability, the subject of sustainability has taken on a greater significance for consumers in recent years. However, it has become less of a priority as they deal with the impact of rising prices. But that doesn’t mean sustainability concerns are disappearing completely, and there is still the expectation that online grocery retailers do their bit. Over half of German consumers think retailers should do more to make their deliveries greener, and 81% of Italian online shoppers would rather order from a retailer that offers recyclable packaging than one that doesn’t.

There is a growing concern that living sustainably is impractical during times of economic hardship. More than half of German consumers who are struggling financially do not believe that leading a sustainable lifestyle can save money. But this is not always the case, and there is an opportunity for online grocery retailers to enhance their appeal by highlighting shopping behaviours that can both save money and have a positive impact on the environment, e.g. buying packaging-free products, or larger refill items. Brands need to do more when it comes to messaging around this and increase awareness that sustainable shopping habits are possible on a budget.

Rapid Delivery

Mintel’s market research found that three quarters of Spanish online shoppers are more likely to shop with retailers that offer fast delivery times. Across Europe, retailers have been tapping into the consumer demand for speed and efficiency in recent years by partnering with delivery apps such as Just Eat and UberEats to offer rapid grocery delivery. Leading retailers, including Tesco in the UK and Carrefour in France, have begun taking things a step further and launching their own rapid delivery services.

‘Direct-to-fridge’ Delivery

Retailers need to focus on innovation that enhances the convenience of the online grocery shopping experience, and there are opportunities to do so through delivery services. In the US, Walmart has successfully launched a ‘direct-to-fridge’ delivery service, in which employees wearing cameras enter a customer’s house to deliver groceries or pick up returns, even if the customer is not present. It is thought that European consumers’ privacy concerns may prevent this concept taking off in this region. So any retailers investing in a service such as this will need to reassure concerned consumers about their security and privacy.

Drones, Robots and Driverless Vehicles

In 2022, Mintel found that over half of consumers in the US thought that companies should invest in electric or hybrid vehicles for delivery, and retailers have started doing just that; experimenting with driverless electric vehicles, drone-based deliveries, even robots! It’s not just in America, we’ve seen this in Europe as well. In the UK, Co-op uses a robot delivery service at selected stores. The robot service uses zero carbon electricity to power small robots which deliver items from the shop to customers’ homes. These new delivery methods are an opportunity to further boost convenience for consumers, and also present a great opportunity for retailers to enhance their sustainability credentials.

Is your business responding to the evolving attitudes and preferences of online retail shoppers? With Mintel’s leading independent market and consumer research, you can focus your strategies to align with the latest trends and developments in online grocery retail. Explore our Retail Market Research, or fill out the form below to receive the latest updates.