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Why the UK online grocery market is leading the world

by Alexander Graf, Co-Founder & Co-CEO of marketplace experts Spryker and author of The E-Commerce Book

Watching the news agenda unfold at the moment, it can be hard to feel that the UK is world-beating at anything. But e-commerce in groceries is one such area, with UK shoppers embracing online grocery shopping more than most and utilising some of the more innovative services in greater numbers.

Grocery stores in the UK have moved swiftly to meet this demand, encouraged further by the emergence of a variety of disruptive start-ups in the sector offering everything from delivery services to specialised products. When it comes to online grocery shopping in the UK, the revolution is already well underway. 

But is even this pace enough? The online groceries sector is a multi-billion-pound industry, and competition is fierce to stake a claim on this market. What’s the best way to provide an experience that keeps customers returning?

UK grocery commerce innovation

Recent Spryker research revealed that 60% of UK consumers are already doing some food shopping online. Furthermore, within two years, one in four Brits sees themselves buying most of their groceries online.

In fact, the UK is known for its focus on innovation. In recent decades, supermarkets and customers have proven willing to try and adopt new concepts far earlier than in comparable economies such as France and Germany. Loyalty card schemes, cashback at supermarket tills, and self-service check-outs appeared in the UK first and remain more widely used.

All the online grocery trends the UK has willingly embraced are likely to be followed in other countries, so market participants will watch the UK with interest. Staying ahead of developments is important for any commerce company, while UK-based food retailers will want to keep up with the exacting pace of change.

The UK – setting the pace for online groceries

When you compare the UK findings with previous Spryker research in Germany and the US, it is clear how advanced the UK market is. While 60% of consumers buy groceries online in the UK, in the US (the land of Silicon Valley, Amazon, and an order-in mentality), only half of shoppers buy any of their groceries over the internet and in Germany, that falls to just one-third.  

In the UK, the number of consumers who can envision doing most or all of their grocery shopping online within the next two years is at 28.3%, markedly higher than in Germany (18.4%) and the US (21.4%). This is likely partly due to the swifter online delivery rollout by established supermarket chains and aggregator delivery apps such as Uber Eats, Just Eat, and Deliveroo.

The average British consumer is already ordering food online and doing so in ever-increasing numbers. The single biggest improvement that would make UK consumers order even more is usability, which was cited by almost twice as many UK (82.7%) as German (43%) respondents.

CX and usability

The usability of online services and overall customer experience (CX) are truly key to success in the UK grocery commerce market. Providers must differentiate and offer their customers the very best experience possible. Notwithstanding the current cost-of-living crisis and subsequent focus on value, the three qualities our research respondents cited as most likely to make them shop online were easier user interfaces, larger product ranges and faster delivery.

Owning customer access is essential to improving CX, an advantage traditional supermarkets have over pure delivery services. Owning customer access presents an enormous opportunity for supermarkets to differentiate, focusing on what they sell and how they sell it. It’s also about providing exceptional customer service to stand apart.

Customers remember their experience buying from a particular store, so it’s time for customer service to get deeply personal. This means owning communication channels like WhatsApp and Messenger to ensure customers’ queries are resolved quickly. It’s about communicating new product lines or offering vouchers based on customers’ specific purchases. In short, it’s all about harnessing technology better.

The importance of composable commerce 

This flexibility entails adopting a more composable approach to commerce. This refers to the selection of best-of-breed solutions to ‘compose’ a highly customised tech stack, tailored to an organisation’s specific needs. 

This is vital to offering the personalised CX that’s so important in a busy online grocery market. Online grocery shopping will become the norm over the next few years, and differentiation and personalisation in CX will be key. The UK is leading the way in grocery commerce, but sector participants cannot rest on their laurels in maintaining and growing market share.