The continued growth of the grocery e-commerce channel is undeniable with 403K new households adopting online shopping. Australians are overcoming online barriers of physical inspection and doubts about quality and accuracy. In the past 12 months there was a 22.9% increase in new grocery online shoppers, as well as a small increases in spend per trip. In fact, the average household purchased online on 6.7 occasions over the last 12 months, and with the average online transaction of $107.85, up from $104.65 last year.
One category breaking barriers to online grocery shopping is fresh produce. While fresh produce is the slowest growing category online, only growing at 14.5% since last year, there are now 293K more households purchasing online than a year ago. Much of the growth in fresh produce online can be attributed to the growing popularity of fresh convenience produce (45.2% value online) and fresh fruit (7.8% value online) and fresh salad produce (75.1% value online). These three categories account for 66.7% of fresh produce department value growth online in the last year.
Beverages and pet supplies are the strongest growing departments online. Interestingly products in these categories are heavy items, so the convenience of being delivered to the front door is being recognised by online customers. In beverages, top items by expenditure include multipacks and two litre bottles. In pet supplies, top items include large pet food bags and litter supplies.
As consumers become more connected and confident with online spending, the grocery e-commerce channel will continue to boom. It is a channel that’s driving substantial growth relative to its share of sales today. The Australian grocery e-commerce channel saw a growth increase of 23.8% for the year ending December 2017, compared with the previous year. E-commerce is growing faster than the total market (1.3%), Coles and Woolworths bricks and mortar (1.9%) and discounters (6.5%), despite only representing 3.0% share of sales today. It is important now more than ever for Australian brands and retailers to have an e-commerce strategy for 2018, especially with the competitive arrival of Amazon in 2017.
Note: This article does not include for fresh produce food boxes and meal kits online (such as Marley Spoon and Hello Fresh).
By Jamie Murray, Senior Manager, Retail Services