UK | The online channel has experienced exceptional growth in recent years and is set to remain the fastest-growing retail channel globally through 2029.
IGD’s latest Global Online Retail Trends report revealed that this growth will add USD 164 billion in sales, bringing the channel’s total to USD 646 billion by 2029.
It is also expected to gain the most market share of all modern grocery channels, increasing by 0.5 percent to reach 6.3 percent.
The report highlighted that while Asia will lead in absolute sales growth, Australasia will see the fastest growth rate, and North America will remain a hub for innovation, with Walmart and Amazon continuing to dominate.
However, this growth comes with profitability challenges. As online penetration deepens, grocery retailers are under pressure to manage rising operational costs and protect margins.
“The way people shop online is different to how they shop in-store, so this is a critical channel to get right. Speed, ease, and convenience are more important than ever to shoppers, which is why online continues to grow rapidly,” said Michaela Jay, Insight Manager at IGD.
“But with disposable incomes under pressure and the perceived higher costs associated with online, retailers must continue to deliver great value and service to maintain momentum.”
To sustain growth and improve profitability, the report urged retailers and suppliers to focus on emerging revenue levers and offset operating costs through four key trends:
- Retail media: Monetising digital advertising space and shopper data.
- Quick commerce: Meeting demand for rapid delivery.
- Fulfilment: Reducing last-mile costs and improving efficiencies.
- Added services: Providing deeper shopper engagement, loyalty and differentiation.
There are varying levels of maturity in the online space. While some businesses have established strategies, others are still developing and evolving their online business plans.
How retailers and suppliers should respond to the four trends will differ depending on the level of advancement in their e-commerce business.
As the industry shifts toward a more connected and shopper-centric model, businesses must start laying the groundwork by aligning their internal operations with evolving customer expectations to remain competitive.
