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Author: Daily Needs247
by Daily Needs247
Posted: May 28, 2016
grocery sales

Online food retail again tops the agendas of grocers as more shoppers surf the Web to buy fresh foods and packaged products. The leaders "deliver the goods" using smart, customer-friendly strategies.

When e-commerce was first recognized as a sea change in business, many companies tried to enter the realm of online grocery. But many of these pioneers failed when the Internet bubble burst, and in the decade since, online grocery sales have grown much slower than the overall e-commerce market.

For the most part, customers in India continue to shop for their groceries by going to stores. However, the online market is growing quickly in some countries. India has a particularly vibrant market, with Internet grocery sales comprising.015 percent of total grocery sales in 2010. In other countries with similar characteristics, however, growth has been slow

This paper examines the business models for online food retail, discusses why food shoppers are often hesitant to purchase groceries online, and outlines the factors that will help grocery retailers succeed online.

Delivering the Goods

France, Switzerland, the United Kingdom, and the United States all have major online food retailers that offer a full range of groceries. The U.K. market is the most developed, with annual combined online grocery sales of major players Tesco, Asda, Sainsbury’s, and Ocado totaling $4.6 billion, or about $110 per person. Switzerland’s market in 2008 averaged $20 per inhabitant, mostly generated by the two leaders, LeShop and Coop@home. In Germany, where the food retail market is dominated by discounters, online grocery has made only a minor dent in sales.

One reason for the gaps across similar countries is that each country has different food retail markets. Unlike Germany, the United Kingdom and France have highly consolidated food markets, with less price competition and fewer hard discounters. This opens the door for "high-value service" retail concepts such as online grocery. Furthermore, some of the requirements for establishing an online grocery market—large metropolitan areas with fewer grocers, high broadband usage, and lots of online shoppers—vary considerably across countries. Online grocers have to adapt their business models, products, and services accordingly.

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Author: Daily Needs247

Daily Needs247

Member since: Mar 21, 2016
Published articles: 4

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