Online grocery sales will see substantial growth through to 2018, probably even overtaking electronic equipment retail turnover, largely because of retail players’ growing ability to innovate with digital technology.

Groceries Now a Strategic E-Commerce Sector

Companies have not yet quite completed their transition to digital technology, but as the sixth annual Digital IQ survey from PwC, the multinational professional services firm, demonstrates, 81% of the IT and business leaders polled believe that technological advances will transform their company in the coming years. The retail sector is certainly no exception to this digital trend and e-commerce is likely to be the key to growing retail sales. The latest report from independent technology and market research company Forrester, entitled European Online Retail Forecast: 2013 to 2018, examines the predicted increase in online sales and forecasts that by 2018 groceries will be the fastest growing sector. The incumbent retail players will therefore need to review and adjust their offerings if they want to remain competitive.

E-commerce and grocery sales on the rise

Forrester forecasts that retail online sales in Europe will grow 12% between 2013 and 2018 to reach around €234 billion in 2018. In France, sales are forecast to almost double over the period, reaching €47 billion. France, the UK and Germany will be the largest markets for e-tailers. A key finding is that the online grocery category looks set to grow at the fastest rate through 2018, surpassing consumer electronics to become the second largest online category in Europe by that year. Although clothing will remain the largest online sales category throughout the period, it is forecast to grow by only 11% a year. These positive online sales growth figures are basically due to the ability of retail players to offer services that fit well with e-commerce. “The constant growth in Internet sales in Europe against the backdrop of a brittle economic recovery demonstrates the importance of digital presence,” underlines Michelle Beeson, who authored the Forrester report.

Retail players adept at digital innovation

The report reveals that consumption habits are steadily moving online, with the proportion of Internet users buying online growing from 65% in 2013 to 75% in 2018. “European retailers need to keep up their level of investment in digital technology and innovation and pay attention to their target customers’ increasingly multi-touchpoint shopping behaviour,” stresses Michelle Beeson. A category of shoppers which Forrester is calling ‘super shoppers’ is now emerging. These are Internet users who tend to systematically research their purchases online and then buy through a range of different channels. Recently several initiatives have demonstrated that digital innovation is something retailers ought to be investing in. One example is the Inspiration Corridor conceived by French commercial real estate company Klépierre to create a bridge between bricks-and-mortar stores and e-commerce by using a technology-packed corridor set up at the company’s shopping malls.

By Eliane HONG