Online Grocery Retailing

This report focuses on four key issues. It provides an analysis into the context the sector operates in by focusing on the wider trends impacting online grocery and crucially it provides all the data needs, by showing how developed online grocery is in the EU now and what the state of play in online grocery retailing will be in the future.  Online Grocery Retailing 2012

Secondly the report focuses on real world examples where online grocery players have made the business model work against all the odds, by focusing on three key case examples. The report explains Tesco, the global online grocery leader and the reasons behind its success, before assessing LeShop, a player that is similar to the UK’s Ocado, in being more of a service provider than a retailer. This case example shows how big the average basket can become in € terms in online grocery and how long it takes for such a business model to become profitable. Thirdly the report takes an in depth look at the drive phenomenon in France, that has led to a growth explosion in the sector.

In the third section the report looks at strategic issues and actionable recommendations and highlights some innovations and growth opportunities in online grocery. We have identified curated shopping, subscription models, generating fulfillment efficiencies, customisation, the online marketplace opportunity and shopping lists as decisive going forward and provide in-depth analysis on real life business case examples.

In the fourth and final chapter the focus shifts to providing an outlook for the sector going forward. The report explains the key learnings around costs and states that leveraging existing asset bases and infrastructure is absolutely vital. Then the real first mover benefits are discussed and we give our view on how the sector will develop when connected kitchens and the rise of the shopping lists is becoming ever more acute.

Finally a section of actionable recommendations rounds off the report, where we give detailed recommendations what retailers and FMCG manufacturers thinking about the online sector should do next.

KEY QUESTIONS ANSWERED

Data 

Which is the biggest European online grocery market - after the UK?
Where is the greatest growth potential in the EU right now? How fast are the markets growing? Is the UK a model that the others will follow? Or is the US model, focusing on shelf staple products first, a more reliable predictor?

Structure of the market 
Why is click and collect so successful in France and Belgium, but not in the Netherlands? What is the state of play in Germany, what is the outlook for CEE and what will happen in Southern Europe and in the periphery? Why is Scandinavia a hotbed of development for online grocery right now?

Amazon 
Why is consumables the fastest growing category of Amazon’s 43 business units in the US? How many Amazon customers buy online grocery products from the pureplayer at the moment? How is the company transforming its front and back end business to drive even faster growth in the US? Which of these innovative techniques are hitting Europe as we speak?


Retailers 
How long will it take Ocado before the company becomes profitable for a whole year, what player has achieved this with a similar business model before?
How big can online grocery baskets become in money terms, and which retailer achieves this (it’s not a UK based player)?
What are Auchan and Tesco up to in terms of internationalising their online grocery operations?
Who are the most promising, innovative and exciting new start ups? Which ones have established themselves by now?

Innovations 
What are the new initiatives in online grocery beyond apps and mobile commerce right now?
What is the next step in the continuing evolution to drive costs down – after click & collect and drive throughs? Where is there untapped potential for lean supply chain management? What have most companies missed out on so far?
How are online grocers driving growth through curation and customisation right now? Why does grocery lend itself perfectly to these concepts?

Marketplaces and subscriptions 
Why are online marketplaces so successful? Which small players are rivalling the multinationals by leveraging local? Why are marketplaces so important for the FMCG industry? Why will FMCG branded storefronts become a huge growth opportunity going forward?
What is the true potential in subscriptions services? What will happen if subscriptions will combine with curation and customisation aspects driven by the shopper? Which retailers are the ones to watch in this space?

The shopping list 
What will the rise of shopping lists mean for the future of online grocery retailing? How can retailers and FMCG players alike exploit this new opportunity? How can they work together? Which role will smartphones play in list management?

Will the connected fridge or bin be central to the list in future? Will the lists of the future be about price or about nutrition? Will it be about convenience, recipes or about new products?
Why is online grocery shopping an ideal test bed for new product innovations and development? What is the future of private label in the online space? How can retailers and FMCG companies get their products on the online shopper’s lists?

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Online Grocery Retailing