To sustain the unprecedented level of growth the grocery market has seen this year into 2021 will require marketers to be more consumer-centric than ever and to understand the major themes that are driving consumer choices, according to Kantar.
Figures from the research firm, reported at a recent Kantar Talks session, highlight the scale of the changes that have taken place:
• the take-home grocery market is growing at 12% year on year (as of September 2020);
• shopping trip frequency has seen a 10% drop; and
• there’s been a 24% increase in the amount spent per trip.
“Whichever way you cut the data it’s extraordinary,” said Matt Botham, strategic insight director at Kantar Worldpanel. “We reckon the grocery market at the end of the year is going to end up in 13% growth. Double-digit growth for the grocery market is absolutely unheard of,” he added.
The most obvious change is the surge in online shopping as people have turned to the channel to meet various different needs (not just social distancing and self-isolating, but also convenience for people not commuting to an office and now available to receive deliveries).
The share of e-commerce has dipped from a peak of 13% in August, but Botham expects it will normalise over the next few years to stand at 10% or 11% compared to a previous baseline of 7% to 8%. Other points to highlight from the lockdown period are that:
• one in three households has shopped online;
• there has been a 172% increase in retired people shopping online;
• the average basket size has increased by £11; and
• e-commerce has made a five-point share gain in 12 weeks, while supermarkets have lost 4.6 points.
While the discounters haven’t suffered much – their channel share is flat – their lack of e-commerce options mean they have missed out on a big opportunity, Botham noted.
“One in three Aldi shoppers are buying their groceries online with someone else. If Aldi could rescue just one of those trips and bring that back into store with a new click-and-collect service, that could be worth an extra £457 million to them and give them a 4% share of e-commerce grocery overnight.”
E-commerce has been “the story of lockdown”, Botham acknowledged, but around 90% of sales are still in physical retail. “Try and maximise the sales opportunity for e-commerce while you can,” he advised, “but for the future you’ve got to think about how those two channels, the online and offline, play together.”
For more on what marketers need to consider for the year ahead, read WARC’s report: Four themes for the grocery market in 2021.
Sourced from WARC