This is a guest blog from Alison Martin, Director, Kantar Worldpanel
It might not be as sexy as virtual reality or robots but, at this year's CES, grocery e-commerce has been the trend that's grabbed the interest of many marketers.
While by no means a mature market – Latin America and large parts of Asia need to address issues of infrastructure before it can thrive, and it has yet to make a serious impact in the US – it is fast becoming a going concern in an otherwise stagnant industry. Online FMCG sales continue to grow, up by 15% globally in 2016, and, by 2025, is projected to command a 9% value share of global spend on groceries.
Until recently, many manufacturers were reluctant to talk too much about the channel; in part due to concerns that its potential for direct-to-consumer offerings will harm carefully cultivated relationships with retailers.
But technology is redefining what it means to "go" shopping. Lines between the physical and digital worlds are blurring. Shoppers are growing accustomed to the benefits of digital in other retail settings and are beginning to expect them in grocery as well.
The idea that any device, from car keys to fridges, can be used for commerce – coupled with the proliferation of mobile wallets – has FMCG companies rethinking how they make money from selling goods online. Each with unique and pioneering ideas on how these benefits can be profitably delivered to consumers; service-based start-ups are fast disrupting the FMCG market.
Dining, delivery, laundry and transportation; these firms are at the forefront of new business models that combine technology and demand: saving consumers time, money and – most importantly – hassle.
Washio offers clean clothes at the tap of a button with on-demand dry cleaning and laundry delivered to your home. Hubbub delivers the best food from over 100 small butchers, bakers and macaroon-makers in a single, simple delivery. Amazon Dash is allowing shoppers to top up on household items without even visiting a website – they just have to hit a button.
Looking east, e-commerce is expanding and experimenting free from the shackles of legacy industries. China's social network Tencent has launched a one-stop ‘shopping' platform for banking services, charity donations, e-commerce, car hire (taxi hire) as well as ticket services.
Amazon clearly sees an opportunity in this market, rolling out same-day delivery options in the UK. While not necessarily cheap, quick delivery brings more shopping experiences, such as "dinner for tonight" into the e-commerce realm. While fast delivery by drone looks some way off, retailers like Amazon are also exploring working in an Uber style with freelance drivers, like Deliveroo and UberEATS are doing for restaurants.
Increasingly – particularly with FMCG – shoppers are shopping along the path of least resistance. As in dining, brands in this space which were once preoccupied with being the most desirable, are fast realising that the future lies in being the most available.
