Online grocery sales growth surging as Amazon enters the fray
ONLINE grocery shopping has grown significantly, up 39.7% in value sales during the 12 months to October 2018 versus the prior year – well ahead of the total grocery market which grew in value sales by 2.7% in the same period, according to actual sales data released by Nielsen.
Nielsen’s quarterly Grocery Ecommerce Report reveals that online grocery continues to carve out a greater share of the Australian grocery market – gaining 1.0 percentage point to reach 3.8% share of total grocery dollar sales.
Coles and Woolworths are the two key players in the online space, taking up approximately 85% of total online grocery value sales. However, Australians’ interest in Amazon and Amazon’s expansion of categories available online in the grocery space, is set to shake up the online grocery landscape, predicts Nielsen.
- Online grocery sales up 39.7% in latest 12 months
- Woolworths’ and Coles’ dominate online grocery sales – set for a challenge as Amazon expands range
- Christmas period set to push online grocery shopping to phenomenal heights
Alfredo Costa, Head of Retail at Nielsen said: “The online grocery landscape is likely to continue its rapid growth as Australians get more comfortable with the experience and certainly as Amazon expands its offering.
“Household brands from across dry grocery categories, such as biscuits, cereals, and confectionery are now available for purchase via Amazon, as is a range of health and organic items which may attract customers looking for specialty items they may not have seen in their local bricks and mortar stores.
“These weeks leading up to Christmas will undoubtedly see a surge in new shoppers’ trialling online grocery stores for their ‘big shop’ during this busy period,” added Costa.
A recent Nielsen survey conducted in September 2018 found that 90% of respondents were aware of Amazon, slightly lower than consumers’ awareness of Woolworths online (94%) and Coles online (93%).
Young transitionals lead the growth online
Nielsen research shows that ‘Young Transitionals’, defined as households younger than 35 years old with no kids, increased the amount they spent online by 94.4% in the last year, and consists of the greatest share of online grocery buyers. ‘Small-Scale Families’, households with children aged between 6-11, also grew by 44.9%.
In terms of items bought online, frozen food, specifically frozen meals, ice cream and frozen vegetables, and confectionery continues to be the leading categories for online sales growth, both recording 57% growth in the last year. These are followed by dry grocery, with 48.5% growth.
Health and beauty remains the grocery department attracting new shoppers at the fastest rate. This could be attributed to the simplicity and convenience of purchasing necessities, such as toothpaste and deodorants online.
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