No supermarket or supplier can afford to downplay the importance of online shopping. That’s the warning from training and research charity IGD, which has released its latest report into the future of the online store, in association with The Consumers Good Forum.
The research forecasts that in the UK, online grocery sales are set to grow by 48% by 2022 and will account for 7.5% of the total UK grocery market.
The landscape of online shopping is also set to change. A survey of senior industry members revealed that 78% of respondents think shoppers will use online price comparison services more regularly to switch to the cheapest retailer, while 67% believe shoppers will be able to choose from a wide range of specialist online retailers underpinned by a common and consistent delivery service.
Additionally, 75% expect more manufacturers to sell directly to consumers online.
But with over half of food and grocery businesses around the world only just starting to prepare for this digital transformation and 11% yet to begin, IGD has set out its vision of the online store of the future and how retailers and manufacturers can prepare.
1. The personal micro store
No online store will be the same, but will change depending on who is browsing. The future will see customers offered individualised and online-exclusive products, personalised promotions, recommendations and advertising.
From the survey, 69% of respondents believe some retailers will apply personalised pricing and promotions in future, while 77% think almost all digital communication to consumers by retailers will be personal.
The online store will also adapt to consumers and learn from experience. For example, if it’s an older shopper, the page may change its font size and tailor its health-based suggestions.
The loyalty scheme will be gamified to keep consumers coming back too.
Simon Mayhew, online retail insight manager at IGD, said: “AI will help to unlock personalisation. The store’s layout will be dynamic and able to predict the customer’s reason for shopping. So, if you need a meal for tonight, your homepage will display only the relevant solutions."
Many products will only be buyable online where there is no constraint on shelf space, and in high-value categories, there will be customisable products, so you can create your own ideal shampoo or cereal, added Mayhew.
2. The smart assistant
Forget that shopping list or reminder on the phone. Nearly two-thirds of the experts predict that smart devices automatically re-ordering products will become a firmly established way of shopping.
The shopping experience will also be more inspirational, through personalised planners and sophisticated digital assistants like chatbots.
The shopper of the future will aspire to live a healthier life and use connected devices to help, from tracking exercise to monitoring weight, with online stores accessing this data to provide product recommendations.
While this area is already emerging in the UK in supermarkets like Waitrose, which is offering DNA testing, 71% of respondents expect some retailers to use the data from connected devices to provide a service offering personalised dietary guidance.
Spoon Guru is also working with Tesco to make it easier for shoppers to search for products based on their personal lifestyle or dietary needs. Using AI and nutritional expertise, it analyses product ingredients to provide curated ranges based on over 180 food preferences.
Subscriptions won’t just be for meal boxes or your favourite magazine. Shoppers will also subscribe to have their favourite products delivered regularly, while household devices, such as washing machines, will connect to the store and reorder when necessary, locking in customer loyalty.
“The online store will offer more than just groceries, it will also help around the house. With populations urbanising and tending to live in smaller properties, businesses will offer services that prevent the need for space-hungry appliances, such as home cleaning and laundry,” said Mayhew.
3. The influence of data on product development
Frustrated shoppers could see their wishes come true. Retailers will see gaps in their ranges through unfulfilled search requests and have a better understanding of product quality through ratings, reviews and feedback to chatbots.
Fulfilment will benefit from more accurate forecasting from robotics and supply chains, meaning online pickers will have fresher products to select, helping overcome one of the biggest barriers to shopping digitally.
Shoppers will incur less waste, with a greater choice of pack sizes and meal planners to help manage quantities and advice on using leftovers.
Amazon has already experimented with this, but IGD predicts unattended deliveries to homes, cars and even ‘straight to the fridge’ will grow in popularity.
However, there will also be new challenges and potential inefficiencies as shoppers will expect faster deliveries, and this means smaller, more frequent orders and customers less forgiving of mistakes.
4. The combination of offline and online shopping
The online and real world will collide. People will switch seamlessly from shopping online and in store with data cross-referenced between the two. This will help bring more personalisation to the physical store and help shoppers find their favourite products quickly and discover new ones.
This is an opportunity that many companies need to work on, says the research, with over half of surveyed respondents saying they haven’t or have only just started to integrate their online and offline teams.
“Before visiting a physical store, you will be able to look online to check in-store, real-time availability, access product information, get product usage ideas and read reviews,” commented Mayhew.
“When you arrive at the physical store, you will then benefit from personalised offers and recommendations. An online app will help you find products and pay for your shopping without cash.”
5. The rise of social media shopping
A scroll through Instagram or Facebook could result in sales. Shoppers will be buying products from digital content such as videos, photos and social media.
In the future, people could be shopping at any time – a consumer could be watching a video or see a still image and just click on it to buy the product.
German food brand Knorr has created the app Eat Your Feed, which uses visual recognition technology to match food snaps on Instagram with personalised recipes from Knorr’s recipe database.