THE STATE OF ONLINE GROCERY RETAIL IN EUROPE - AN EXTENSIVE GUIDE FOR RETAILERS AND FMCG BRANDS ON KEY EGROCERY MARKET DEVELOPMENTS AND TRENDS ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Data delivery, simplified
THE STATE
OF ONLINE
GROCERY
RETAIL IN
EUROPE
AN EXTENSIVE GUIDE FOR RETAILERS AND FMCG
BRANDS ON KEY EGROCERY MARKET DEVELOPMENTS
AND TRENDS ACROSS EUROPE AND THE US
RELEASED: JULY 8TH, 2015Table of Contents
Introduction................................................................................... 2
Executive summary...................................................................... 3
Grocery retail at a digital tipping point .................................. 5
Egrocery: 4 trends that are shaping the industry ................. 6
Expert opinion: what’s next in egrocery? ............................. 10
Country Focus................................................................................. 12
The UK................................................................................. 13
The Netherlands................................................................ 19
Germany............................................................................... 24
France................................................................................... 29
The US.................................................................................. 34
The emerging market: India....................................................... 39
Expert opinion: FMCG in ecommerce....................................... 43
Predicting the future of egrocery in Europe and the US ....... 45
1Introduction
Last year the research team at Syndy (formerly SyndicatePlus) showed
that the global egrocery market was heating up fast. However, consumer
penetration and online grocery sales were still at an early stage.
Today, consumers in Europe and the US increasingly turn to online grocery
stores for their shopping. The online channel is expected to grow to €80BN+
by 2018, with consumers noticing the benefits online brings, like higher
convenience. For retailers and suppliers the growing egrocery market offers
many opportunities, but cracking the code still proves difficult.
Our latest report - The State of Online Grocery Retail in Europe 2015 -
has been written for every egrocery player: forward-thinking as well as
conservative retailers and suppliers. Vast resources have been put to use to
build the report, which is full of refreshing insights about today’s market.
The report studies the four most developed egrocery markets in Europe as
well as the US; the largest egrocey market in the world. It also looks at India;
one of the fastest-growing, and potentially largest egrocery markets of the
world. Last but not least, Syndy’s research team interviewed several industry
experts and picked their brain about the market.
We hope this study proves useful to retailers and suppliers as they prepare, or
continue to build their online businesses.
Feel free to contact us if you have any questions.
Kind regards,
Pieter van Herpen
CEO Syndy
2Data delivery, simplified.
Executive Summary
This report presents an extensive of online giants like Amazon also
study of the online grocery increased, not just in the US with
industry across the most advanced AmazonFresh, but also in Europe
markets in Europe. It focuses on (where consumers are limited to
the United Kingdom (UK), the ordering Non-Food products only).
Netherlands, France and Germany, Amazon has invested millions into
as well as the United States (US) its online grocery business, and
and covers key market trends traditional retailers, both large
and developments within the and small, have decided to invest
competitive landscape. Moreover, resources into their own online
the report includes a special read offerings too.
about India, an emerging market
showing rapid growth in the online 2) ”THE LAST MILE” REMAINS THE
grocery domain triggered by high BIGGEST CHALLENGE IN GROCERY
adoption of new technologies and DELIVERY
innovation. Following extensive
research, this report identified The expanding pick-up point
key developments in the egrocery network in Europe was one of
market across 2014: the highlights of the year. For
example, the Netherlands saw an
1) DOUBLE-DIGIT GROWTH IN extraordinary +680% increase
WESTERN EUROPE AND THE US in the number of pick-up points
compared to the beginning of
The four European countries and 2013. Throughout 2014, most
the US each showed remarkable traditional retailers moving online
double-digit growth of online chose the pick-up point delivery
grocery sales last year. The Dutch model for their roll-outs. At the
market grew fastest, with +55% same time, established players
growth. The French market grew continued to grow their pick-up
slowest, but still reached an point networks, with the goal
impressive +25% growth. The to expand their reach in less
German and the British markets populated areas. For retailers, the
grew 38% and 26% respectively. pick-up point model makes most
Penetration increased significantly economic sense, yet consumers
across all countries. In 2014, 16% prefer home delivery since
of European consumers bought “convenience” is the key driver
groceries online, compared to behind online grocery shopping.
13% in 2013. With market value Retailers are therefore searching
and consumer adoption growing for new ways to offer home
at accelerated rates, the egrocery delivery at minimal costs, or even
market has achieved significant for free. Membership schemes like
progress. This was driven by Amazon Prime give consumers
the surging popularity of new access to unlimited home delivery
business models and new players in return for a fixed monthly
appearing on the horizon. The role fee. These plans are growing in
3Executive Summary
popularity across consumers and advance its online venture. Clearly
retailers. the partnership was beneficial
to both parties; it allowed Ocado
In search of best practices, retailers to create an additional stream of
are fine-tuning their grocery revenue which enabled its first
delivery models. Too often they year of profits. In the US, Whole
offer both home delivery and a Foods partnered with Instacart
pick-up point network. The success (grocery delivery startup) to learn
criteria for delivery models varies from the startup’s mobile expertise
across countries and cities, with and avoid costly logistical and
geographic conditions, population platform developments. Following
densities and economical health successful pilot schemes, the
driving decision-making. The most partnership is now expanding
viable model will be a balance across the US.
of economic feasibility and
consumer demand; a strategic mix In further developments, research
of delivery models tailored to a shows that online players - big and
market (a city or country). So far small - increasingly target cities,
home delivery reigns in densely instead of countries, for their
populated big cities, with high rollouts. Both Amazon and Google
average purchasing power while launched their online grocery
pick-up points do best in “spread ventures in New York and San
territories”, where home delivery Francisco. These online players are
is too costly for retailers. targeting specific areas that meet
the conditions for their business
3) NEW EFFICIENCIES THROUGH models to work. Following
UNIQUE RETAILER PARTNERSHIPS this trend, country’s egrocery
ecosystems will vary across cities
Across 2014 competition became that are densely or sparsely
increasingly intense, with both populated.
traditional and pure online
players pushing innovations and
driving operational excellence.
Interestingly, some of the biggest
traditional retailers looked for
new ways to shortcut costly
IT developments. They did so
by outsourcing key business
capabilities to third parties. For
example, in the United Kingdom
Morrisons (traditional retailer)
partnered with Ocado (pure
player) to benefit from their 15
years of ecommerce and online
distribution experience, and so
4Grocery retail at a digital
tipping point
The grocery industry comprises one of The global egrocery market is growing
the largest segments in global retail, in fast, with a value of €80 billion expected
which established international players by 20186. Today, grocery retailers that are
lead the way with significant market share. successfully selling their products online
Nonetheless, the state of the industry are creating immense value, especially
is changing rapidly. Traditional grocery compared to retailers that are not (yet)
retailers must deal with increasing price online. Consumers that are happily
wars, reducing margins and growing ordering their groceries online will likely
consumer appetite for organic health food. have a preferred store, due to the time
Simultaneously, digital trends are forcing spent creating a profile, searching for
retailers to adapt their business models. In products and adding billing information.
2014, the global grocery market was valued This represents a huge threat to grocery
at € 3 trillion (Figure 1), making it 3x larger retailers that have not yet emerged online,
than the global apparel industry1. In 2014, - but have the ambition to do so. Winning
the grocery market in Western Europe was over the hearts of consumers who already
valued at €936 billion, with the UK alone have a preferred online store will be a
representing 55% of total retail sales2. challenging task.
1
Data Monitor (2014)
The grocery industry is reaching a digital 2
IGD (2014)
3
Fast Moving Consumer
tipping point, with much of its growth Goods (2014)
expected to come from online. In fact, 4
Dunhumby (2014)
some FMCG3 brands are already claiming
5
Nielsen (2014)
Euromonitor
20-50% of sales from online purchases4. A International (2014)
combination of factors is responsible for 6
BCG (2013)
this growth; expanding online offerings,
new technologies, increased efficiencies
and consumer preferences for convenience
are among the most important ones5.
Figure 1: GROCERY RETAIL MARKET SIZES (2014) Figure 1
Sources: Plunkett
Research (2015), GIA
(2012), PlanetRetail
(2013), RetailMeNot-
Centre for Retail
Research, Forrester
3,000
Research.
billion € 936
billion €
Global Western Europe
5Egrocery: 4 trends that are
shaping the industry
TREND 1: BUSINESS MODEL photography, videos and interactive digital
content, like recipes, take the consumer on
DIVERSITY EXPANDS IN a richer grocery shopping journey. In-store
EUROPE retailers can connect with consumers using
mobile. For example, certain retailer apps
As the egrocery market develops and allow consumers to browse all products
expands the diversity of business models while shopping or creating shopping lists
also increases. Business models that proved on the go. The challenge lies in satisfying
successful in countries like the US and the shoppers’ needs wherever and whenever
UK are now being replicated and adopted they want to shop, and understanding their
globally. Traditional retailers are competing motivations, which can be divided into
with pure online players and established convenience and experience seeking. There
global ecommerce companies are entering is no longer a linear purchase journey, as
the online grocery domain. As a result, the consumers are constantly switching between
market includes a rich diversity of players, channels and devices and expect nothing less
each with different capabilities to compete than a seamless shopping experience.
within the market. Table 1 shows an overview
of the different types of players competing
in the egrocery field.
TREND 3: MOBILE
TRANSACTIONS GAIN
TREND 2: OMNI-CHANNEL MOMENTUM, ACCOUNTING
REMOVES BOUNDARIES AND FOR 1 IN 5 ONLINE GROCERY
TIME-FRAMES IN GROCERY ORDERS
RETAILING The omni-channel revolution involves the
integration of the mobile channel, in which
To help them shop smarter, consumers draw
the number of transactions is increasing day-
information from more channels and devices
by-day. Today, 3 out of 10 online transactions
than ever before. In response retailers are
in Europe are completed via a mobile
creating new touch-points to feed growing
device7. It is estimated that global mobile
consumer appetite for shopper information.
purchases will be worth €100 billion in
The omni-channel revolution underway aims
20158, equivalent to 8% of total ecommerce
to remove boundaries and time-frames from
sales. In online grocery, an average of 20-
the shopping experience. Companies are
35% of orders come from mobile9. Ocado
innovating to make the online-offline barrier
exceeds this average, with its mobile orders 7
Adyen, 2015
as seamless as possible; from drone delivery 8
Dyn, 2014
corresponding to 45% of the total amount10.
and physical pick-up points in universities, to
Because of this trend, many companies have
the Amazon Dash; a button consumers push
decided to enhance mobile user experience
to order certain products, and receive them
and focused their resources on mobile apps
at their door.
and websites. There is no doubt that a sound
understanding of how consumers use mobile
The omni-channel trend is very much
devices in their purchasing journey will
present in grocery shopping. In the online
provide retailers with a significant advantage
channel, rich product information, product
when fine-tuning their online offerings.
6Egrocery: 4 trends shaping the industry
Table 1: TYPES OF ONLINE GROCERY MARKET PLAYERS
CATEGORY TYPE
Traditional RETAILER WITH RETAILER IN A
A DEDICATED PARTNERSHIP WITH
ECOMMERCE ANOTHER PARTY
BUSINESS UNIT
• Develops both: • Outsources
brick-and-mortar its ecommerce
and ecommerce operations.
businesses. • Do not need to invest
• Focuses on the in infrastrcuture and
omnichannel offering. capabilities.
Examples: Examples:
Tesco (UK), Morrisons & Ocado
Walmart (US), (UK),
Albert Heijn (NL). Whole Foods &
Instacart (US).
Online-Only PURE ONLINE CONCIERGE SERVICE PRODUCER NICHE / CATEGORY
PLAYER SPECIALIST
• Sells products online- • Leverages a network • Delivers straight • Focuses on one
only. of personal shoppers from the suppliers. specific product
• Dedicates all to deliver groceries • Responds to the category or segment.
resources and from different stores. organic and healthy • Offers unique
capabilities to the • Highly flexible due to trend. assortment.
online channel. no inventories.
Examples: Examples: Examples: Examples:
Ocado (UK), Instacart (US), FreshDirect (US), HelloFresh (EU),
Peapod (US). Shopwings (DE). Abel & Cole (UK). Blue Apron (US).
Category GLOBAL TECHNOLOGY, LOGISTICS OR ECOMMERCE COMPANY
Expansion • Have global presence and state of the art capabilities in IT, logistics, ecommerce and/or other
areas.
• Expands its reach into online grocery, using existing capabilites and networks.
Example Technology:
Google - Google Express (US),
Example Ecommerce:
Amazon - AmazonFresh (US),
Example Logistics:
DHL - Allyouneed Fresh (DE).
Syndy Model.
Sources: Coca Cola Retailing Research Council (2014), GMA, BCG, Google, IRI (2014), BMO Capital Markets (2015).
7Egrocery: 4 trends shaping the industry
TREND 4: DELIVERY MODEL
OPTIMISATION CONTINUES IN
ONLINE GROCERY RETAIL
Most online grocery retailers offer two
options for consumers to receive their
groceries: home delivery and pick-up
points. Regarding home delivery, 25% of
the world’s grocery shoppers claimed to
have used this service, and 55% claimed to
want to try it11. However, for retailers the
model often makes no economic sense due
to low population densities, lack of scale,
complicated logistics required for fresh
produce, or unwillingness of consumers to
pay extra for delivery. On the other hand,
pick-up points are more viable in terms of
operational costs and initial investments.
As a result, grocery retailers are working
hard to polish their distribution processes
and possess a profitable mix of offerings.
Table 2 shows the advantages and
disadvantages of the delivery models and
several use cases.
9
Ocado (2014)
10
MyWebGrocer (2014)
11
Nielsen (2014)
8Egrocery: Four trends shaping the industry
Table 2: DELIVERY MODELS IN EGROCERY
PROS CONS TYPICAL / IDEAL ADOPTER
In Store Pick-up • Small initial investments; • Double workload for Brick-and-mortar retailers.
• No duplicate stock-keeping; replenishement; E.g. WalMart (US).
points • Low floor space requirement; • Challenging data
• Flexible staff planning. synchronisation;
• Faster out of stocks;
• In store congestion.
Stand alone • Flexible (longer business • High initial investments; Brick-and-mortar retailers.
hours and more locations); • Lower consumer willingness E.g. Auchan (FR).
Pick-up points • Convenient for consumers; to use compared to home
• Increases the number of delivery;
touch-points with consumers. • Time intensive;
• Involvement of more
stakeholders.
Home delivery • Preferred by consumers. • Very high initial investments; Brick-and-mortar retailers,
• High maintanance costs; Pure online players.
• Requires scale of operations. E.g. Albert Heijn (NL); Ocado
(UK).
Home delivery • Small initial investments; • Complex stock monitoring; Brick-and-mortar retailers.
• Flexible - demand driven; • In store congestion; E.g. WholeFoods and Instacart
(done by a 3rd • Dependance on third parties; (US).
• No floor space requirement.
party) • Limited process optimisation.
Sources: FMI & GMA (2014), Oliver Wyman (2014)
9EXPERT OPINION
What’s next in egrocery?
Retail expert Christian van Someren discusses the state of
online grocery in Europe, and what can be expected in the
near future as the market continues to expand.
1. IT IS PREDICTED THAT ECOMMERCE from existing stores. As the online market
WILL ACCOUNT FOR NEARLY HALF OF THE grows, you see existing players having in-
TOTAL FMCG GROWTH IN THE NEXT FIVE store pick-up, dark stores, and dedicated
YEARS. HOW DO YOU FORESEE THE ONLINE ecommerce warehouses. I believe all of
CHANNEL EVOLVING? them will continue to exist.
It will further accelerate - globally 3. CAN THE PICK- UP POINTS MODEL BE
there are new players stepping into the SUCCESSFUL IN COUNTRIES LIKE THE
market. Grocery is the biggest market in NETHERLANDS?
Christian van consumer spending, and ecommerce is still
Someren relatively small when compared to total I think people are more interested in
grocery sales. I think that with players home delivery. We see it in more mature
Christian founded like Amazon being active in this market, markets. Even in France where the pick-up
the first online online grocery will accelerate very fast in point concept was invented, people who
supermarket in the the upcoming years. The market will be have tried the delivery of goods to their
Netherlands - Truus.nl. divided between those who seek comfort homes prefer this model by far. As for the
He has also worked and those who seek a richer experience. Dutch market, I think it is good for retailers
for one of the largest Instacart’s shoppers seek comfort, having to develop the pick-up point networks
FMCG companies in somebody else going to the store and because it is a low-cost model enabling
the world - Procter getting groceries for them. Some other retailers to sell groceries online. But if you
and Gamble. Currently, people seek the experience, and are willing want to be a winner, you have to solve
Christian advises to engage more with food. Today, people home delivery.
companies on who buy online mainly do so to stock their
managing their digital pantries. For example, in the UK people do 4. WILL THE MEGA TREND OF MOBILE
transformation. online grocery shopping on average 12-13 COMMERCE AFFECT THE ONLINE GROCERY
times a year. This frequency will increase as RETAIL MARKETPLACE? HOW CAN PLAYERS
more people buy fresh products online. RESPOND?
2. ONLINE GROCERY RETAILERS EMPLOY Yes for sure, and it starts with supplying
DIFFERENT OPERATIONAL MODELS, SUCH the right product content on mobile
AS DELIVERY FROM STORES, DARK STORES, devices. I believe that a lot of parties
DEDICATED WAREHOUSES ETC., TO SERVE are struggling with that. Online grocery
ONLINE CONSUMERS. WILL ALL OF THESE orders are very large in terms of number
MODELS CONTINUE OR WILL THERE BE A of items in a basket, and people take a lot
CONVERGENCE? of time to fill in their digital baskets. It
would be therefore more convenient for
It depends on geography and growth of consumers to put items on their mobile
the market. If a supermarket is starting devices at the moment when the problem
in the online grocery retail business, it is comes up. So they empty their last bottle
by far most efficient to deliver the goods of milk, and they can immediately put it on
10What is next egrocery?
“RETAILERS NEED THE BEST PRODUCT INFORMATION
AVAILABLE, WHICH I THINK SHOULD BE THE FOCUS FOR THIS
CALENDAR YEAR.”
their shopping list. A good integration with 7. MORRISONS’ PARTNERSHIP WITH OCADO
mobile would solve a lot of issues that we IS AN EXAMPLE OF HOW TRADITIONAL
are facing nowadays with online shopping. RETAILERS CAN OUTSOURCE THEIR ONLINE
OPERATIONS. DO YOU FORESEE SIMILAR
5. ARE THERE ANY INNOVATIONS WE PRACTICES BECOMING MORE PREVALENT IN
CAN EXPECT IN ONLINE PRODUCT THE NEAR FUTURE?
REPRESENTATION?
Ocado invested around 400 million to get
I think product representation will change where it is now. The company is under
a little. We might go to 360° views of pressure for growth - and for that it needs
products, virtual reality etc. But I think more volume. On the other hand, there are
that the biggest innovation will come from some retailers that cannot make or are not
links between products. With the growth willing to make such investments, but want
of ecommerce, the number of products to learn and serve their customers online
increases and it becomes more difficult for as well. So I think this is quite a natural
people to find the products they need. By movement for both sides. Yet there are
linking products, people can browse more certain risks as well. Whose customer is it
easily through product sets. But in order in the end? That is the big question. For
to focus on more advanced innovations, example, Morrisons started providing a lot
connections, and techniques, we need the of information about their customers and
basics. Retailers need the best product delivering it to Ocado. In the longer term
information available, which I think should if people are less loyal, and Ocado has all
be the focus for this calendar year. The these customers in their database, sooner
natural next step is building product or later it can influence customers to order
relations. directly from Ocado. In these kinds of
collaborations, there are always tensions.
6. CAN TRADITIONAL GROCERY RETAILERS I understand that this is beneficial for
COMPETE ONLINE WITH ALL THESE both parties now, but in the long term it is
INNOVATIVE COMPANIES ENTERING THE interesting to know: What will happen?
MARKET?
8. AMAZON HAS RECENTLY ANNOUNCED ITS
If traditional retailers are not able to PLANS TO EXPAND THROUGHOUT EUROPE.
develop an online formula on time, I believe HOW DO YOU SEE CURRENT PLAYERS
they will have a very big problem. A couple SURVIVING THIS AND ACTUALLY BECOMING
of retailers are already missing out. There PROFITABLE IN ONLINE GROCERY RETAIL?
will also be a shake-up in the upcoming
years: Instacart is completely changing There is a fundamental difference between
the way in which people are shopping for Amazon and other players, since Amazon
groceries online since it is making use of an is always around 0% profitability, purely
existing channel. Supermarkets will still exist focusing on growth. It is very difficult to
online, but I believe the power will shift to compete with Amazon, yet players have to
innovative players like Instacart. We see it in be more willing to invest and take more risks
a couple of other retail markets; the growth because the risk of doing nothing, or doing
of the online channel has had a big influence too little, is way bigger. But competition will
on how the market landscape looks. This will be fierce, that is for sure.
happen with grocery retailing as well.
11Country
Focus
THE NETHERLANDS p.19
THE UK p.13 GERMANY p.24
FRANCE p.29
THE US p.34
12The UK
UK’S ECONOMY AND ECOMMERCE MARKET prices to drop by 2% in a year, the highest Figure 2: COUNTRY
drop in the market since 2006.15 Despite FACTS
The UK is Europe’s third-biggest economy these losses, Tesco still leads the way with
with a GDP of £1.8 trillion (2014). It is also a 29% market share, followed by Asda UK’s GDP:
the third-most attractive country for controlling 17% of the market.
ecommerce in the world, after the US and
1.8
trillion £
China12, and ranked first in Europe in terms The offline wars have quickly transformed
of ecommerce revenues (£45.0 billion in the online market into the new competitive
Figure 3 : Internet and online shopping penetration in the UK
No. of online shoppers:
50.3 million.
No. of Internet
users: 57.3 million
Population:
63.7 million
10% 50% 100%
2014). With 79% of the British population arena and as a result, most of the industry’s Figure 2, 3
shopping online, ecommerce is the fastest players are investing heavily to establish Source: Eurostat (2014);
growing sales channel in the country. It is their positions online. In fact, the online CIA world Factbook
expected to more than double by 2019.13 grocery channel in the UK is the most (2014); Statista &
IMF (2014); ITU, UN
Consequently, the UK is the European developed in Europe, accounting for ca. population division,
benchmark for ecommerce in many 4.4% of total grocery purchases - worth World Bank, (2014);
Centre for Retail
different industries. £7.7 billion.16 The UK’s online grocery Research (2014).
industry also shows incredible potential,
UK’S GROCERY MARKET: DISCOUNTERS GAIN and is expected to represent 6.3% of the
MARKET SHARE WHILE ONLINE KEEPS ON total grocery market by 2016.17
GROWING
THE BIG FOUR FOCUS ONLINE
The UK’s grocery market has been
12
A.T. Kearney (2015)
13
IGD (2014)
embroiled in a price war for a long time. Price and retail space wars have made the 14
Kantar Worldpanel
Tesco, Asda, Sainsbury’s and Morrisons, brick-and-mortar market progressively (2014)
15
The Telegraph (2015)
also known as “The Big Four”, have been more hostile. As a result, the UK’s market 16
IGD (2014)
forced to cut prices in efforts to compete leaders were looking for ways to create 17
IGD (2014)
with discounter chains like Aldi and Lidl. extra value for consumers. The online
Last year brought bad news for The Big channel was offering a wealth of untapped
Four, which lost significant market share opportunities. This movement towards
(from 80% in 2013 down to 72.8% in 201414) online caused a significant change in 2014.
to the discounters. Price wars also caused
13The UK
Let’s start with the market leader, Tesco, The program will now reward consumers
which announced ‘digital’ as the heart of with personal discounts and coupons that
their new company strategy. Controlling they can redeem through the mobile app.19
38% of the online market, the company is Another effort to make online and offline
at the forefront of innovation in every area, boundaries disappear is its 3D virtual store,
aiming for omnichannel leadership (see by which Tesco aims to integrate the online
next section). experience with the classic in-store look
and feel (Image 1).20
Asda, with a 15% of the online grocery
market share, announced a plan to almost
triple online sales to €3.8 billion by
Table 3: UK’S ECOMMERCE AND EGROCERY
2018. Aggressively expanding its pick- FIGURES (2014)
up point network, Asda plans to roll out
Ecommerce market size* 45.0
to 1,000 locations, and make same-day
(Billion £)
procurement the norm.
Sainsbury’s, who also has 15% of the Ecommerce market as a % of 13.5
the total retail market Table 3
egrocery market, has optimised its online
infrastructure building new dark stores,
Grocery retail market size 174.5 Source: Retailmenot
opening new pick-up points and expanding (2014); Centre for
home delivery reach. With a current (Billion £) Retail Research
two-year plan, Sainsbury’s aims to put (2014); Eurostat,
Online grocery retail market 7.7 (2015); IGD (2013 &
personalisation at the center of its online
2014).
experience. size
(Billion £) * Sales of goods,
Morrisons signed a 25-year agreement excluding fuel and
sales of prepared
with Ocado to outsource its online Online grocery retail market as 4.4 food in cafes and
operations through Ocado’s logistics a % of the total grocery retail restaurants. Tickets,
network. Morrisons.com launched in market holidays, gambling
January 2014, closing the year with a 2.6% and insurance are
egrocery market share. also excluded.
Penetration of online 25.0
grocery shopping (% of total
TESCO, THE DIGITAL INNOVATOR
population)
With a plan to become the master of
omnichannel experience, the retail giant
has announced that every arm of its ALDI TO BEGIN TESTS ONLINE
business will feature a digital aspect. In
fact, it is cutting back on physical store In the beginning of 2015, announcements
openings to focus on the online channel. in the German media hinted that one of
18
IGD (2014)
In an attempt to improve the omnichannel the German discounters, Aldi, was planning 19
PSFK (2014)
experience for it shoppers, the company to test the online grocery market in the 20
Brick Meets Click
is expanding its pick-up point network and UK. The retailer still had not entered (2015), IGD (2015)
increasing capacities through dark stores. the online market due to the channel’s
Tesco is also focusing on innovations expensive operations, which clash with the
that will merge online and offline in a discounter’s low-cost model. Nonetheless,
seamless experience.18 For example, with the online market expanding at such a
Tesco’s digital clubcard, being trialled in high rate and 25% of UK’s shoppers already
London, aims to completely personalise doing their grocery shopping online, Aldi
consumer experience to increase loyalty. is wary of losing out. Tests in the UK, a
14The UK
Image 1 : TESCO’S 3D VIRTUAL STORE
15The UK
Figure 4: MARKET SHARES AND REVENUES OF GROCERY RETAILERS IN THE UK (2014)
50.1
Retail
revenue
(Billion £)e
29.5 29.3
19.7
10.3 8.9
8.4 6.1
3.8 3.1 3.7
0.9
Total
29.1 16.9 16.8 11.3 5.9 5.1 4.8 3.5 2.2 1.8 0.5 2.1
grocery
market
share (%)
S
SE
’S
A
O
VE
L
D
EN &
*
s
I
D
N
er
O
D
D
RY
AN
SC
D LS
O
AL
O
O S
AS
TI
LI
D
th
T
TR
IS
U
TE
EN BO
CA
RA
EL
O
SB
RR
AI
IC
PE
EP M
IN
W
O
D SY
-O
M
SA
CO
E
IN
TH
Figure 4
mature ecommerce market, will determine infrastructure and operating capabilities to
Source: Kantar
if the discounter rolls out its online power third-party online retail enterprises. Worldpanel (2014);
operations in other countries.21 This way, traditional brick-and-mortar Company Reports (2014).
retailers can outsource the development e - Syndy’s estimate;
OCADO’S FIRST YEAR OF PROFITS of their online operations and rapidly build * Online-only player.
scalable and profitable online businesses.
Ocado, the world’s largest pure online Ocado expects new partnerships with
grocery player, reported its first profitable international retailers to materialise in the
year in 2014. After declaring a loss of £12.5 near future.23 In addition to the milestones
million in 2013, Ocado announced a profit achieved in 2014, Ocado promises to keep
of £7.3 million in 2014. The egrocer has on growing - now with 12% of the online
43,000 SKUs (Stock Key Units) in its range grocery market (0.5% total market). Ocado’s
and boasts a consumer base of 453,000 agenda will undoubtedly influence the
active users with 183,000 weekly orders. way online grocery retail develops in the
Ocado’s mobile apps and algorithms UK and, to a certain extent, the rest of the
epitomize digital innovation. The Scan & world.
Shop app lets shoppers add items to their
baskets by scanning barcodes. Soon, the HOME DELIVERY FOR GROCERIES, PICK-UP FOR
Apple Watch will allow online shoppers to NON-FOOD
use voice recognition for it to automatically 21
Brick Meets Click
add items to the list. To further facilitate The UK’s Big Four are expanding their pick- (2015), IGD (2015)
online shopping experiences, Ocado up point network all over the country. This
22
Ocado (2015)
23
Reuters (2014)
also offers an Instant Shop function that seems to be an intelligent strategy, given 24
Internet Retailer (2015)
predicts a consumer’s basket based on the fact that 73% of UK’s shoppers use
previous purchases.22 pick-up points.24 What’s interesting is that
while the British seem to love this option,
Ocado’s profitability is primarily due to the they prefer home delivery for groceries
company’s new supplementary business, purchased online. Thirteen percent of the
Ocado Smart Platform, and its partnership British use home delivery as their preferred
with Morrisons. In fact, Ocado is leveraging delivery method, with 49% having tried it
its logistical services by offering its before. On the other hand, only 1% of the
16The UK
Figure 5: MARKET SHARES AND REVENUES OF ONLINE GROCERY
RETAILERS IN THE UK (2014)
2900.0e
Online retail
revenue
(Billion £)
Figure 5
e e
1150.0 1150.0 1134.2 Sources: Reuters
903.8 (2013); IGD (2014);
Company Reports
(2014); Internet
Retailer (2014);
262.0 200.0 Telegraph UK (2014).
e - Syndy’s estimate.
Online
37.7 15.0 15.0 11.8 3.4 2.6 14.2
grocery
market
share (%)
O
’S
A
O
SE
S
s
er
N
D
SC
D
RY
O
O
AS
th
CA
TR
TE
U
IS
O
SB
O
RR
AI
IN
W
O
SA
M
British prefer pick-up points.25 Sainsbury’s and Ocado).27
The membership model is driving loyalty in
HOME DELIVERY MEMBERSHIP SCHEMES: THE the online channel. Once having subscribed
SOLUTION TO ONLINE LOYALTY to a retailer’s membership program, the
consumer is committed for a longer period
For years, ecommerce and logistics of time and is therefore unlikely to switch
experts have endeavored to make home to other retailers. On the other hand, with
delivery profitable. This delivery model consumers aiming to get the most out
is costly and logistically challenging, and of their money, frequency of purchases
online shoppers are usually the ones increases. With growing awareness of
who absorb most of these high costs membership schemes, almost half of the
through delivery fees. The situation is online grocery shoppers in the UK could be
therefore unsatisfactory for both online subscribed to one of these programs by the
shoppers and egrocers alike. As a result, end of 2015.28
attempts have been made to make home
delivery more attractive, and retailers now
offer consumers a compromise via the
conventional loyalty model: memberships.
25
eMarketer (2015)
Through membership schemes, online 26
Business Insider
grocery retailers can lower shipping (2015)
27
fees and secure returning customers. IGD (2015)
28
Internet Retailer
By allowing the distribution of delivery (2015)
costs in an annual, biannual, or monthly
fees, memberships offer consumers an
alternative, which can actually save them
money.26 Currently, 26% of British online
grocery shoppers belong to one of the
available home delivery membership
schemes in the country (Tesco, Asda,
17Key takeaways
• Due to intense price • The UK’s egrocery • Morrisons’ partnership
wars in the British segment is the most with Ocado has proved
grocery market, developed in Europe, to be a good example
discounters Aldi and Lidl worth £7.7 billion at of traditional grocery
have won market share 4.4% of total the total retailers entering the
at the expense of the UK grocery market. online arena. With
traditional Big Four - Ocado’s infrastructure
Tesco, Asda, Sainsbury’s • The UK’s grocery and know-how,
and Morrisons. market leader Tesco Morrisons scaled its
announces digital ecommerce business
• Ecommerce is the innovation to be at from 0 to £200 million
fastest-growing channel the heart of its new in just over a year,
in the UK. The country strategy, indicating making it the fastest
is ranked number one the grocer’s ambition growing online grocer
in Europe in terms to further develop its in the world.
of online sales. More omnichannel presence.
importantly, online • 73% of Brits have
sales are expected to • Pure online grocery used a pick-up point
double by 2019. retailer Ocado to receive grocery
announces its first products they’ve
• Extreme competition year of profits. Part ordered online, yet
in grocery retail of Ocado’s success is the UK’s shoppers still
has accelerated the thanks to the “Ocado strongly prefer home
development of the Smart Platform”- a new delivery over any other
online channel in the branch of business model.
UK. All players are focused on partnerships
investing heavily in with retailers who use • Membership models
their online ventures. Ocado’s infrastructure are becoming more
Accordingly, it is and expertise to popular amongst
reasonable to expect operate online. retailers and consumers
that the UK will be in in the UK. In 2014,
the egrocery driving 26% of all UK online
seat for the foreseeable grocery shoppers had
future. subscribed to a home
delivery scheme.
18The Netherlands
DUTCH ECONOMY AND ECOMMERCE MARKET market (Figure 8). Figure 6. COUNTRY
FACTS
The Netherlands is the seventh-largest In 2014, online grocery retail accounted
economy in Europe (16th globally), and for roughly 1.3% of the total grocery
NL GDP:
despite its small area, it is also the 10th retail sales in the Netherlands with an
most populated country on the continent. estimated value of €450 million. From a 727.2
billion €
Ninety-six percent of Dutch people have market worth ca. €290 million in 2013, the
access to the Internet. It explains why growth of the online grocery segment in
ecommerce is so popular in the country. 2014 tured the Netherlands from a young,
Figure 7: Internet and online shopping penetration in the Netherlands
No. of online shoppers:
12.0 million
No. of Internet users:
16.2 million
Population:
16.9 million
10% 50% 100%
In fact, 71% of the total population shops underdeveloped market into a maturing Figures 6, 7
online.29 This makes the Netherlands one that is quickly gaining pace.
Source: CBS Nederland
a very interesting country for online One of the reasons behind the slow initial (2014); Statista &
grocery retail. So far, the Dutch egrocery development has been a lack of serious IMF (2014); ITU, UN
population division,
market developed fast compared to the competition to the market leader Albert
World Bank (2014);
neighbouring countries but did not reach Heijn (ah.nl), which has kept delivery fees Statista & IMF, (2014),
the level of the leading markets like the UK high and, as a result, slowed the market’s Centre for Retail
Research (2014); Eurostat
and France. growth.31 Nonetheless, the emergence of (2014).
aggressive competition in 2014 accelerated
THE DUTCH GROCERY MARKET: EGROCERY the online channel development. Based
GAINING SIGNIFICANCE on the current growth scenario of the 29
Statista (2015)
Netherlands, Dutch online grocery retail 30
ING (2015)
The total grocery retail market in the is expected to catch up with leading 31
Coca Cola Retailing
Research Council (2014)
Netherlands is valued at €33.8 billion.30 countries, like the UK and France, within 32
Syndy’s discussions
The market is led by Albert Heijn, which 2-3 years.32 This accelerated growth will with industry experts.
controls 34%. Jumbo Group follows with be partly due to Albert Heijn’s continuous
a 20% market share. The other half of the attempts to lead in the omnichannel
market is shared by smaller players and domain. But a larger catalyst for change
the two German discounters, Aldi and will be the new players: from giant retailers
Lidl, which are gradually gaining a share (such as Jumbo) to smaller retailers (like
of the Dutch grocery market. These two DEEN), to new start-ups materialising.
discounters together control 20% of the
19The Netherlands
ALBERT HEIJN FACES COMPETITION FROM ITS sector. In the producer category, Bonativo
MAIN RIVAL is taking its much-beloved markets online,
delivering food to people in Amsterdam
For years, Albert Heijn has been the only from the farm to the fork. Concierge
relevant player in the Dutch egrocery services are also popping up all over the
business with its ecommerce site ah.nl. country, following Instacart’s success in
But as the market grew, and consumers the US. Players like UberMart and Poqapp
adopted new technologies, other players are offering personal shopper/delivery
joined the party. In November 2014, Jumbo services in certain areas of the country.
started its journey into egrocery. In just While some companies will not survive
two months, the company opened 28 pick- their start-up years, other business models
up points. Through aggressive expansion, will prove successful and add value to the
Jumbo plans to earn 5% of its total revenue Dutch egrocery ecosystem. Successful
from online sales by 2017.33 start-ups can become serious competition
for traditional retailers, if they have the
SLOWER ROLL-OUTS FOR SMALLER RETAILERS
Table 4 : DUTCH ECOMMERCE AND Table 4
Players like Coop, Deen, Dekamarkt,
EGROCERY FIGURES
Spar, and PLUS are also investing in Source: Retailmenot
online expansion. Choosing to execute Ecommerce market size* 6.0 (2014), Centre for Retail
this process in phases, these grocers are (Billion €) Research (2014); ING
(2015); Eurostat (2015).
opening pick-up points in their stores to
e - Syndy’s estimate;
enable online shoppers to receive products Ecommerce market as a % of 7.1 *Sales of goods,
ordered online. Some are also testing the total retail market excluding fuel and sales
of prepared food in cafes
delivery in specific areas of the country and restaurants. Tickets,
where they have strong positions. For Grocery retail market size 33.8 holidays, gambling
and insurance are also
example, Deen delivers only in the north (Billion €) excluded.
of the country, quietly developing new
capabilities before starting operations on
Online grocery retail market 0.5e
a national level. This play-it-safe strategy
size (Billion €)
could be the smartest move for smaller
brick-and-mortar players. This way they
move together with the market towards Online grocery retail market 1.5e
online grocery retail while keeping costs as a % of the total grocery
controlled to avoid any negative margin retail market
shifts. Another example is Coop. Its
efforts in online grocery gave the retailer Penetration of online grocery 15.0
a 69% increase in online sales in 2014.34 shopping (% of the total
The results are evident in Coop’s recently population)
renewed ecommerce site, which is more
user-friendly and conversion-driven.35
33
Het Financieele
Dagblad (2015)
34
Coop Financial Report
BEST- IN-CLASS EGROCERY CONCEPTS ARRIVE (2014)
35
Coop Financial Report
TO THE NETHERLANDS technological expertise and flexibility to (2014)
stay lean and react quickly to the changes
Start-ups, both Dutch and international, in the market. For example, while some
are also starting to enter the market. traditional players invested years into their
HelloFresh, de Krat, and Bilder & De Clercq online roll-outs, UberMart managed to
(which recently started a cooperation with begin operations in a matter of months.
PLUS), are taking on the meal delivery
20The Netherlands
11.6
Retail
revenuee
(Billion €)
4.7
3.3
2.8
2.5
2.03 1.96 1.9
1.0 0.7 0.7 0.6
Total
grocery 34.3 14.0 9.7 5.7 2.9 2.1 2.1 1.7 8.3
7.4 6.0 5.8
market Figure 8
share (%)
Source: IRI (2015),
Nielsen, (2014), Company
JN
O BO
KT K
P
ET
N
G
s
I
Reports (2014), Franchise
L
US
& RE OU 0 0
D
er
D
O
A R DIR
IN
EE
AL
P)
)
LI
EI
E K U P)
R 0
PL
LI
CO
th
GR M
LD
Plus (2014).
AI G 1
D
GV
U
H
(
JU
C
O
A M LT
O
RT
O
H
O
BE
D S
AR
H
BO
e - Syndy’s estimate.
E T BO
AL
SP
L
UM
UM
(J
(J
D
Figure 8: MARKET SHARES AND REVENUES OF GROCERY RETAILERS IN THE NETHERLANDS
(2014)
PICK-UP POINTS POPPING UP EVERYWHERE willing to pay on average €4 to get their
WHILE THE DUTCH STILL PREFER DELIVERY groceries delivered to their doorsteps.39
Experts suggest that home delivery will be
Over last two years, the pick-up point the winning formula to conquer the online
network in the country has seen extreme grocery segment in the Netherlands, given
growth of almost 680%, increasing from the logistical feasibility that comes from
ca. 45 collection points in January 2013 to high population density. While a hybrid
more than 350 by the end of 2014. With formula is a good strategic approach, it is
traditional retailers rolling out their online clear that to gain advantage in the Dutch 36
Levensmidelenkrant
strategies and adding walk-in pick-up points egrocery market, mastering home delivery (2015)
37
IGD (2015)
to their current stores, other retailers, like all over the country is a necessity. 38
Foodlog.nl (2014)
Jumbo, have started aggressive pick-up 39
Deloitte (2014)
point expansion. The group plans to open TENSIONS IN FRANCHISING RELATIONSHIPS:
3-5 a week - reaching a 100 pick-up point OPPORTUNITIES FOR NEW ONLINE PLAYERS.
quota by the end of summer 2015. These
points will be opened in three modalities: The success of a retailer is highly influenced
walk-in, drive-through and stand-alone.37 by the performance of its franchisees. For
this reason, communications should always
There are more than 350 designated points be kept clear and relationships focused
for grocery pick-up across the Netherlands on the common benefits for both parties.
(Figure 10),38 so it could be expected that When it comes to ecommerce activities
this delivery model is the most successful in the Dutch grocery retail market, the
in terms of consumer preference and agreements between franchisors and
usability. This is not the case, however. Pick- franchisees are often unclear. This lack
up points might be the retailers’ preferred of detailed arrangements has created
model due to its lower cost structure tensions in the partnerships that are
and higher coverage, but it is not what affecting the growth of egrocery in the
consumers prefer. In fact, Dutch consumers Netherlands, especially home delivery.
highly prefer home delivery (80%) and are For example, it is ambiguous who should
21Figure 9: MARKET SHARES AND REVENUES OF ONLINE GROCERY RETAILERS IN THE
NETHERLANDS (2014) The Netherlands
240.0
Online retail
revenue
(Million €)
166.0 e
Figure 9
21.0 e 16.0 e Source: Company reports
(2014); Franchise Plus
7.0 e
(2014); Twinkle Magazine
(2014).
Online
53.0 5.0 4.0 2.0 36.0
grocery e - Syndy’s estimate.
market
share(%)
JN
US
AR
N
s
er
EE
PL
EI
SP
th
D
H
O
RT
BE
AL
be responsible for activities like delivery In response to this situation, new initiatives
when franchisees join a retailer-owned are being made by franchisees to take
ecommerce network, or how much the matters into their own hands. An example
franchisees will earn from online orders is www.AH-afhaalpunt.nl, a private
picked up at their stores. Moreover, ecommerce network of Albert Heijn
new unforeseen costs are causing some franchisees that already counts 33 pick-up
franchise holders to resist riding the wave points.41 Opportunities also arise for new
of online grocery, stating damage to profit players like UberMart. The start-up has a
margins as the reason. Jumbo seems to be network of personal shoppers who shop
the main player in establishing conventions in franchised Albert Heijn stores in the
with their franchisees. It has set protocols Rotterdam area that are not yet a part of
about the distribution of online sales, the the ah.nl network.
presence of pick-up points at franchisees, 40
Het Financieele
Dagblad (2015)
and has agreed upon guarantees in case of 41
Levensmiddelenkrant
sales cannibalisation.40 (2015)
Figure 10: PICK-UP POINTS IN THE NETHERLANDS (2014) Figure 10
SPAR: 81 DEEN: 70 HOOGVLIET: 56 COOP: 53 ALBERT HEIJN: 34 JUMBO: 28 Source: Company
Reports (2014); Foodlog
(2014).
22Key takeaways
• The grocery • Start-ups like • The complexity
retail market in UberMart, de Krat and of ecommerce
the Netherlands is Bonativo are innovating agreements between
dominated by Albert in the online grocery franchisors and
Heijn (34% market market with flexible franchisees has
share), followed by business formulas. created tensions in
Jumbo Group (20%) However, they are still grocery partnerships
and the German in the very early stages that have slowed
discounters Aldi (9.7%) of their development the development
and Lidl (7.4%). and do not yet have a of egrocery , but
significant influence also generated
• 71% of the Dutch on the Dutch egrocery opportunities for third
shop online; 15% do market. parties like www.
their grocery shopping AHafhaalpunt.nl.
online. • Pick-up points are the
preferred distribution
• The Dutch egrocery model among retailers,
market experienced with the total number
the fastest growth increasing 680% in two
of all researched years and currently
European countries, exceeding 350 points.
with an impressive However, Dutch
+55% in 2014. Most of consumers still strongly
this growth came from prefer home delivery
traditional retailers (80%).
venturing online.
• 2014 was the year
in which traditional
retailers like Jumbo
and Deen entered the
market and rolled out
their online services.
AH.nl still leads
(53% market share),
but it is now facing
competition.
23Germany
GERMAN ECONOMY AND ECOMMERCE compared to any other market in Europe. Figure 11: COUNTRY
MARKET This has created a full-on price war in the FACTS
country where traditional retailers are
Germany, with a GDP of €3.1 trillion, is forced to drastically cut prices in order to
the 4th biggest economy in the world and stay competitive. DE GDP:
the biggest in Europe. It also represents 3.1
the second-largest ecommerce market in trillion €
Europe, after the UK, worth €42.9 billion.
Figure 12: INTERNET AND ONLINE SHOPPING PENETRATION IN GERMANY
No. of online shoppers:
56.6 million
No. of Internet
users: 79.1 million
Population:
80.8 million
10% 50% 100%
Clothing is the most popular product Figures 11, 12
category among German online shoppers, ONLINE GROCERY RETAIL IN GERMANY: FEAR
Source: Eurostat (2014);
while other categories such as groceries OF LOSS PUSHING TRADITIONAL GROCERY CIA world Factbook
show promising potential. RETAILERS ONLINE (2014); Statista &
IMF (2014); ITU, UN
population division,
GERMAN GROCERY MARKET: DOMINATION BY 5 For a long time, fierce price competition World Bank (2014);
MAIN PLAYERS and high starting costs made the egrocery Centre for Retail
Research (2014).
market attractive for niche players only. To
Germany’s grocery industry is the largest stay cost-efficient, these small and often
in Europe, with sales of €247 billion in specialised efood shops focused on urban
2014. The grocery market in Germany is districts with high population densities.44 42
Trade Dimensions
characterised by three factors: First, years Bigger players saw no opportunity in the (2014)
of ongoing mergers and acquisitions have online food channel, due to Germans’ 43
GRINSeiz (2014)
44
GRINSeiz (2014)
created a market dominated by a handful preferences for low prices and specialised
of players. The top five German retailers food. Consequently these conditions
control 72% of the market.42 Second, the slowed the market’s growth. The landscape
German grocery market is highly saturated. changed when international players like
It is estimated that every German Amazon started to gain traction in the
household has 3.5 food stores within a German market selling FMCG products
10-minute radius.43 Finally, discounters online. Afraid of missing out on the online
play a more prominent role in Germany movement, traditional players had no
2451.9 Germany
Retail
revenuee
(Billion €)
38.0
34.1
33.2
29.7 Figure 13
27.5
Source: Retailmenot
(2014); Centre for
Retail Research (2014);
Lebensmittel Zeitung
8.8 7.5 (2014); Trade Dimensions
6.4 5.4 (2014); Eurostat (2015).
4.7
e - Sydny’s estimate.
Total
21.0 15.4 13.8 12.0 11.1 3.6 3.0 2.6 2.2 1.9 13,4
grocery
market
share (%)
E
E
E
KT
N
S
s
E
E
E
D
er
BU
PP
PP
PP
PP
PP
PP
AN
N
AR
th
LA
U
U
RU
O
RU
RU
RU
M
O
GR
GR
M
GL
ER
SS
-G
-G
G
I-G
E
A-
E-
Z-
KK
RO
N
RI
RO
D
W
AR
EK
AN
GE
AL
LE
RE
ET
ED
W
LM
RO
M
H
SC
GE
-D
M
N
TE
D
Figure 13: MARKET SHARES AND REVENUES OF GROCERY RETAILERS IN GERMANY (2014)
choice but to follow and start developing TABLE 5: GERMAN ECOMMERCE AND Table 5
their online ventures. EGROCERY FIGURES
Source: Centre for
Ecommerce market size* 46.3 Retail Research (2014);
2014: A YEAR OF EGROCERY IN GERMANY (Billion €) Lebensmittel Zeitung
(dfv Media Group, 2015);
Trade Dimensions (2014);
Egrocery in Germany took a big leap Zum Handeln Geschaffen
Ecommerce market as a % of 9.7 - Das Magazin für
forward in 2014. The market grew 38%
the total retail market size Handelswissen (2014);
from 2013, reaching a value of €2 billion. Eurostat (2015).
The growing market - now composed of
Grocery retail market size 247.2 e - Syndy’s estimate;
traditional retailers, online-only grocers, *Sales of goods,
(Billion €)
and niche players - has created a trend excluding fuel and sales
that urges lagging retailers to develop of prepared food in cafes
and restaurants. Tickets,
egrocery strategies. As a result, traditional Online grocery retail market 2.0e holidays, gambling
brick-and-mortar retailers have been size and insurance are also
excluded.
investing significantly to expand their (Billion €)
online offerings. An example is REWE,
which has invested heavily in its online Online grocery retail market 0.8% e
grocery business and now delivers in 63 as a % of the total grocery
cities. These efforts made REWE’s online retail market
sales almost quadruple in 2014.45 (Billion €)
Start-ups have also started to enter the Penetration of online grocery 11.0% 45
Fresh Plaza (2015).
market, following the success of other shopping (% of the total
companies in foreign markets, but their population)
lasting power in such a competitive
market is still to be seen. One case worth
mentioning is that of ShopWings, the range. ShopWings launched in the German
“German Instacart.” The company, with its market in late 2014, working to deliver
network of personal shoppers, collected groceries from 6 different retailers,
and delivered groceries to consumers including discounters Aldi and Lidl, giving
in Berlin and Munich within a two-hour the company a competitive edge as these
25Germany
Figure 14: ONLINE GROCERY MARKET SHARES OF RETAILERS IN GERMANY (2014)
Gourmeo24: 2.2%
EDEKA 24: REWE: AMAZON*: EBAY*: ALLYOUNEED FRESH: Mytime: Real:
14.5% 13.2% 10.9% 6.8% 6.3% 5.3% 3.9% Saymo: 2.1%
Rossman: 1.8%
Gourmantis: 2.2%
Lebensmittel.de: Gourmondo:
Biowelt: 2.2%
5.5% 5.0%
Natur.com:
Figure 14 Bringmeister: 2.7%
5.3%
Source: Lebensmittel Feinkost 24: Food.de: 2.9%
Zeitung.net (2014); 3.6%
TradeDimensions (2014).
Allerlei-bio: 3.5%
*Does not sell fresh food.
chains do not yet have an online store.
This edge, however, was not enough to FOOD DELIVERY 2.0: DHL AND
establish ShopWings in the German market, ALLYOUNEEDFRESH.DE
and it ceased operations there in July 2015.
It does, however, continue to be successful Allyouneedfresh.de is a DHL owned
in the Australian and Indonesian markets. egrocer operating in Germany. Since
Figure 14 shows some of the main players 2012, the company has been offering an
in online grocery retail in Germany. extensive range of products (more than
20,000) with a large offer of organic and
ECOMMERCE GIANTS -AMAZON AND EBAY fair-trade products. Having its own DHL-
AMONG THE GERMAN FAVOURITES operated logistics network since 2014, the
products that Allyouneed Fresh sells are
Amazon.com and eBay are among the claimed to be fresher than those sold at
most popular choices for consumers when traditional supermarkets. Picked up from
purchasing food and FMCG products the wholesalers’ markets in the morning
online.46 These ecommerce giants hold and home delivered that same day, produce
the third and fourth place in market share goes through a continuous cold chain
of food delivery services, despite the fact from pick-up to delivery to ensure, and
that they do not offer fresh produce.47 guarantee, freshness. This reliable delivery
Consumers prefer these international network allows consumers to track their
players because of the wider selection of orders, personalise their preferences,
products, and due to the desire to purchase and have groceries delivered within the
products online that are difficult to find same day or during the evening, which
elsewhere, like foreign food specialties. is when most consumers are at home. 46
eMarketer (2014)
47
Statista (2014)
The strong position of Amazon in FMCG, With this network, the company has a 48
Statista (2015)
and its continued intimations about 6% share of the online delivery market 49
Allyouneed (2015)
expanding AmazonFresh across Europe, in Germany.48 Not content with stopping
starting with Germany, has shaken the there, Allyouneed Fresh aims to continue
rest of the market. Even if there is still no growth and positions itself as the fastest
indication when AmazonFresh will be rolled distribution center in Germany. This is food
out, the announcement alone has made delivery 2.0.49
traditional retailers react. As a result, a
number of new egrocery projects launched
across Germany.
26You can also read
