E-commerce: scenario and critical issues
In Italy, e-commerce is worth more than 6 billion euros and the number of shoppers who buy online is growing, however, sites dedicated to grocery shopping are not taking off.
How is e-commerce doing in the grocery sector in Italy?
Pet products drive online sales growth
The pandemic has strongly pushed the expansion of e-commerce and consumer goods are increasingly relevant in total purchases, making up 15.8% of total spending in Europe.
In particular, in Italy the online channel generates a turnover of more than 6 billion euros, with strong growth rates for products intended for pets, home and personal care, while the share in food has slightly decreased (-0.6%). A NIQ research report highlights how shoppers are making online purchases in an increasing number of product categories and that, as regards food and beverages, preference is for retailers with an existing network of physical stores.
Brands dominate the shopping cart, PL accounts for ‘only’ 7.2% of the turnover
But how are purchases segmented? It is mostly men who shop online, and more than 70% of orders come from Generation X (38.3%) and Millennials (35.6%), however the habit is also spreading among older and younger users; the latter, obviously, will become increasingly relevant. In the virtual cart, branded industry products prevail, while private labels are worth only 7.2% of purchases (against 27.9% in the physical channel). As payment, 65% of Italian consumers prefer card, debit card or bank transfer, but other methods such as Amazon, Apple or Google Pay are growing. Promotional events, from Black Friday to Amazon Prime Days and Christmas, are crucial for e-commerce sales.
Loyalty as a lever for growth
Based on research by Statista, Italy is in third place in Europe for shoppers who have bought food online at least once (43%, compared to 64% in France and 51% in the United Kingdom). The penetration rate, however, stops at 6% and this means that users approach the online channel, but then abandon it. The main challenge, therefore, is loyalty, not the acquisition of new customers.
Consumers turn to the online channel above all to order food items that they cannot find in physical stores, while the experience (not entirely positive) is summarized by the following data: 25% of users believe that buying online saves time (a very low percentage if we consider that the purpose of e-commerce is precisely to save time), 23% declare that the operation is simple while 21% believe that there is vast choice. Users also highlight various problems related to payments. All this shows that the Modern Retail is not yet able to offer a completely easy e-commerce service in the grocery.
Strategies for improving the shopping experience
What strategies should be implemented? Firstly, retailers online ranges should feature ‘exclusive’ products – private labels could be an optimal solution in this sense. Optimization itself is a crucial factor: for example, a delivery cost that decreases the longer the time slot could be a nice solution. The value of the user’s time must absolutely be rethought, providing for quick orders, shopping lists, one-click reordering (a function particularly appreciated in e-commerce in other sectors). Product sheets should also highlight the benefits for those who follow a particular diet or intend to prepare a certain recipe. Filters are therefore appropriate, so as to improve the choice. The use of WhatsApp should also be considered, for which strong investment is expected in the future. Finally, the implementation of well thought through loyalty programmes and communicating with consumers is essential.
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