Online Grocery Retailing 2012

Published: May 2012

Publisher: ResearchFarm Ltd

Product ref: 165204

Pages: 140

Format: PDF

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Price: $ 1662.58

Report description

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. 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. 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?

Table of contents

Executive summary
Context – the Macro-economic outlook for the EU
GDP sizes: EU 27, 2011 in €bn, the structure from Germany to Malta
GDP sizes: EU 27, 2007-2011 in ‘000 €bn
GDP sizes: EU 27, 11 countries still lagging behind their 2008 levels
GDP sizes: EU 27, Currency devaluations, Poland keeps momentum going, ECB action
Unemployment: EU 27, annual average 2011 (%) from Spain to Austria p22 Unemployment: EU 27, Misery in the periphery while…
Unemployment: EU 27, …Germany roars on due to the right policy mix
inflation: Euro Area and EU27, 2006-2011 (HiCP), %
inflation: EU 27, deflation avoided, lost decade in store?
inflation: Euro Area 17, 2006-2011 (HiCP), %, welcoming Estonia
interest rates: ECB and BoE, record low rates and quantitative easing
interest rates: breathing space for southern Europe, LTRO
Context – EU Retailing in 2012
Retail sizes: EU 27, 2007-2011 in ‘000 €bn
Retail sizes: EU 27, crisis has left a deep, deep scar
Retail sizes: EU 27, 2007-2011 growth in %, CAGR
Retail sizes: EU 27, a sector in turmoil, e-commerce, housing markets, ageing populations
Per capita retail spend: EU 27, 2011 in €, from Luxembourg to Romania
EU Grocery Retailing in 2012
Grocery sizes: EU 27, 2007-2011 in ‘000 €bn
Grocery sizes: shoppers cut back, shop around, trade down and go to hard discounters
Grocery sizes: EU 27, 2007-2011 growth in %, CAGR
Grocery growth rates: EU 27 2007-11 in %, growth in Poland, decline in ireland Grocery growth rates: ireland as a template for the rest of the periphery?
Grocery sizes: The leading countries, Top 3 take one of every €2 spent
Grocery share of total retail: EU 27, 2007-2011 in %
Grocery share of total retail: Clear crisis impact - all but four show higher share again
Grocery per capita sizes: EU 27 in 2011 in €, from the UK to Bulgaria
EU Grocery Retailing in 2012 – Online sizes
Online grocery sizes sizes: EU 27, 2007-2011 in ‘000 €m e
Online percentage share of total grocery: EU 27, UK, France, Benelux and Spain
Online grocery: Scandinavia a hotbed of development, tough German market
Online grocery: CEE the opportunity, driven by Auchan, Tesco et al
Online grocery: EU Growth rates and forecast to 2015
Forecast 2010-2015: data EU Total & Online grocery in €bn
Drivers of Change
Drivers of change: The ESTLE background
Drivers of change: retailer push and consumer pull
Drivers of change: Technological innovation and click & collect
Drivers of change: starting the beneficial cycle
A model for future development? LeShop – the service provider
LeShop: a model for other markets?
LeShop: First y – o – y decline, as Swiss shop abroad and Coop ramps up online
LeShop: link up with Swiss Post, home deliveries only pm or evenings
LeShop: Chilled storage box solution – no need for cool chain
LeShop: the data, 31k new customers per year
LeShop: M-commerce and the Migros advantage
A model for future development? Tesco – the multichannel retailer
Tesco: The European and global online grocery leader
Tesco: The crucial club card advantage
Loyalty: Why has Tesco invested in online?
Tesco: Market maker, moving towards dark stores
Tesco: incremental online sales, higher online than offline share
UK – data, Tesco customers, average spend and growth
Tesco: a closer look at the data, the marketplace opportunity
Loyalty: Tesco Clubcard migrating online
Tesco: the opportunity in store, free Wi-Fi, click & collect and drive
A model for future development? Drives in France
Auchan:


Figures, hyper vs Chronodrive
France: The development of the drive solution
The Chronodrive model: growing strongly
France: arterial roads, pure solution versus add on, cost management
Click & collect: Data, Q4 2011 France
France: no trading permits needed, boom in the format
France click & collect: 892 stations, 30 new per month
New concepts: 6 ideas for online grocery
New concepts: strategies and recommendations, curated shopping and subscriptions
New concepts: strategies and recommendations, running empty and customisation
New concepts: strategies and recommendations, marketplaces and internationalisation
New concepts: strategies and recommendations, the shopping list
New concepts: curated shopping
Linas Matkasse: the recipe pioneer from Sweden
Linas Matkasse: curated e-commerce in grocery
Linas Matkasse: an update of box schemes
New concepts: subscription models
Subscribe & save: Amazon’s transformation of US online grocery
Amazon: The supplier relationship potential
Amazon: Dynamic brand stores
New concepts: Beyond drive and click & collect, the potential on the return trip
New concepts: multichannel retailers making the store estate count
New concepts: making online grocery deliveries efficient
New concepts: Reducing the empty runs
New concepts: Partnerships will become a necessity as online shopping continues to expand
New concepts: customisation and personalisation
MyMuesli: The customisation opportunity
Customisation: Let the shopper control the personalisation of products
New concepts: marketplaces, collaboration potential
Marketplaces: FMCG - necessary online presence
Marketplaces: especially pertinent in online grocery
FMCG response: Alice the industry portal
Alice.com: the premier FMCG marketplace operator, the US operation
Alice.com: European expansion Strengths of marketplaces: The model
Strengths of marketplaces: free market research, price competitiveness
Strengths of marketplaces: beneficial cash flow
Strengths of marketplaces: unlimited range and network effects
Marketplaces: the future
Marketplaces: from Japan’s Rakuten to Denmark’s Nemlig, from global to local
Foodzie: one of many US player trying to replicate etsy’s business model in food
New concepts: The rise of the shopping list
Shopping lists: a new reality, a change for good?
Shopping lists: the internet push, how to get on the list
Shopping lists: virtual shelf ends, nudging shoppers
Learnings & Outlook
Learnings: story so far
Key learning: sweat the existing asset base and infrastructure to control costs
Key learning: it takes time, scale and the space is getting crowded
First mover advantage: the benefits
First mover advantage: the benefits, Tesco’s gains First mover advantage: the benefits, Ocado and organics, on versus offline share
Outlook: trends for the next three years
Outlook: online only brands, connected kitchen
Outlook: product centric versus customer centric operators
Actionable recommendations
Actionable recommendations: what multichannel and pureplayers should do now
Actionable recommendations: what retailers and FMCG companies should do now
Sources 
Table 1: GDP sizes: EU 27, 2011 in €bn
Table 2: GDP sizes: EU 27, 2007-2011 in ‘000 €bn
Table 3: inflation: Euro Area and EU27, 2006-2011 (HiCP), %
Table 4: inflation: Euro Area 17, 2006-2011 (HiCP), %
Table 5: Retail sizes: EU 27, 2007-2011 in ‘000 €bn
Table 6: Retail sizes: EU 27, 2007-2011 growth in %, CAGR
Table 7: Per capita retail spend: EU 27, 2011 in €
Table 8: Grocery sizes: EU 27, 2007-2011 in ‘000 €bn
Table 9: Grocery sizes: EU 27, 2007-2011 growth in %, CAGR 
Table 10: Grocery share of total retail: EU 27, 2007-2011 in % 
Table 11: Online grocery sizes sizes: EU 27, 2007-2011 in ‘000 €m e
Table 12: Online percentage share of total grocery: EU 27
Table 13: Forecast 2010-2015: data EU Total & Online grocery in €bn
Chart 1: Unemployment: EU 27, annual average 2011 (%) (1)
Chart 2: Unemployment: EU 27, annual average 2011 (%) (2)
Chart 3: interest rates: BOE
Chart 4: interest rates: ECB
Chart 5: Grocery growth rates: EU 27 2007-11 in %, (1)
Chart 6: Grocery growth rates: EU 27 2007-11 in %, (2)
Chart 7: Grocery sizes: The leading countries
Chart 8: Grocery per capita sizes: EU 27 in 2011 in € (1)
Chart 9: Grocery per capita sizes: EU 27 in 2011 in € (2)
Chart 10: LeShop: the data
Chart 11: UK – data, Tesco customers, average spend and growth
Chart 12: Auchan:


Figures, hyper vs Chronodrive
Chart 13: Click & collect: Data, Q4 2011 France
Chart 14: New concepts: making online grocery deliveries efficient

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