Spryker, the leading platform for Enterprise Marketplaces, Thing Commerce, and Unified Commerce, has launched its ‘Australian Online Grocery Report 2022.’
The research of 2500 Australian consumers finds almost half – 48% – of Australians buy least some of their groceries online, with 10% now ordering most or all of their groceries via the internet. In total, 23% of Australian household food budgets is now spent ordering online.
The research, conducted by Spryker in partnership with market research firm Appinio, surveyed consumers from across Australia on their experiences and opinions of grocery shopping.
With the Australian grocery market currently valued at $125bn, there is substantial opportunity for retailers offering services in online grocery shopping. “In fact, almost one in five respondents (18%) said they see themselves buying most or all of their groceries online within two years. Currently, shoppers in the 25-44 age group are most likely to order online and spend the highest percentage of their grocery budget online compared to other age groups. However, those in older age groups (45-65) match the younger groups in terms of the total amount spent online – despite this being a lower overall percentage of their grocery budgets. Respondents in the 55-65 age bracket were most likely to cite the desire to avoid crowded supermarkets and thus minimise the risk of contracting Coronavirus as a motivation for shopping online,” according to the report.
A “pleasant” in-store experience
Despite the market expanding, online retailers face one key hurdle – 75% of respondents’ grocery budgets are being spent offline and 88% of shoppers see in-store supermarket shopping as something pleasant. “This is significantly more positive than US sentiment. An equivalent Spryker survey on American online groceries from December 2021 found only 55% of US shoppers thought in-store shopping was a pleasant experience. Even in the mature online grocery market of Germany, 73% of shoppers said they found shopping in-store pleasant according to Spryker’s German survey from July 2022.”
“Our latest research has shown that Australian shoppers are most focused on lower costs and better product selection when it comes to buying online. Given that the in-store shopping experience is a positive one for the majority of shoppers, tempting them to buy more groceries online will pose a challenge for many retailers. But it’s also a huge opportunity,” says Spryker co-founder and CEO Boris Lokschin.
“Retailers that are working with composable commerce solutions will be best prepared to grab market share in this sophisticated and dynamic grocery market. Their focus must be on delivering a seamless online shopping experience that exceeds consumers’ expectations, and with a best-of-breed approach, retailers can have the flexibility to adjust to changing customer needs. Whether offering wider product choices, flexible delivery and collection options, or uniting with on-demand delivery partners, the Australian online grocery market has significant growth potential for organisations willing to provide a top digital commerce experience.”
The online winners and offline losers
Looking at who misses out when shoppers made more online purchases, 22% of respondents reported heavy cuts to their spending in health food stores, while a further 15% reduced spending at local farm shops and open-air markets. “Surprisingly, only four per cent reported spending less at supermarkets. Drilling into this, the duopoly between Coles and Woolworths, both of whom have significantly invested in their unified commerce experiences – enabling them to offer flexible in-store, online, curb-side pick-up and home delivery easily – accounts for the minimal reduction in spending at supermarkets over any channel,” the report found.
“Meanwhile, 10% of shoppers also said they bought markedly less at discount retailers. Therefore, an opportunity exists for these discount retailers, with 87% of respondents saying they would do more food shopping online if prices were lower. Given that only 4.4% of the Australian population lives more than 20 minutes from a supermarket, lower pricing could help to grow online buying for discount retailers and tempt people away from supermarkets within their 20-minute radius. Beyond price, consumers can potentially be lured away from mainstream supermarkets by a wide range of service factors including easier user interfaces (75% likely or very likely), wider product ranges (77%), better availability nearby (78%), and faster delivery (76%).”
Another category that could benefit from improved digital commerce experiences are local retailers. “Many consumers would like to see their local suppliers offering online options: a full 40% want to order from local markets and farmers online. In addition, 25% of respondents think that organic shops should be online. When asked which specific provider they would like to see online, 12% of respondents mentioned Perth-located Farmer Jack’s, making this Western-Australia-based provider of regional, local, and organic food the fifth-most frequent answer given – a strong showing, particularly given that only 11% of Australians live in the state,” the report found.
Amazon unable to stand out
“Despite Amazon’s significant investment in the online grocery market – both globally and in Australia, only 42% of Australian consumers cited Amazon when given a list of online food delivery operators and asked which ones they recognized. Meanwhile, 84% of survey respondents recognised Uber Eats, and 77% recognised Menulog; Doordash followed in third place with 75% brand recognition, with Deliveroo fifth at 66%. Looking beyond just recognition, 62% of respondents said they use Uber Eats (24% regularly) and 31% are Deliveroo customers (eight per cent regularly) highlighting how well established those two brands have become in Australia.”
The full Australian Online Grocery Report 2022 is available at efoodinsights.com/australia-online-grocery-report/.