Online grocery shopping yet to take off in Australia

Posted by Daniel Palmer on 8th December 2008

Australians are yet to embrace the internet when it comes to shopping for food and groceries, according to a survey released today by Deloitte.

The survey discovered that food and groceries were the least likely of 12 categories to be researched over the internet, with only 6% conducting research online as opposed to 94% in-store. The leader of the category, outings and entertainment, had 73% of people conducting research on-line, highlighting a major gulf between different product categories when it comes to online shopping.

About 5 per cent of Australians ‘will purchase groceries and food online’, making it the second least likely category – only ahead of furniture and homewares. This compared unfavourably with the 53% who would purchase outings and entertainment related products/services over the internet. Those between the ages of 44 and 54 were the most likely to purchase groceries online, with about 10 per cent willing to do so.

Additionally, 93% claimed they would purchase groceries and food exclusively in-store, with only 2% likely to purchase exclusively online.

Katrina Doney, Director of Deloitte Growth Solutions and consumer behaviour expert, said that increasing numbers of consumers are using the internet to research and compare products, prices and store offerings.

Online shopping

“Results of the survey show that online research is important regardless of whether or not the consumer is buying the product on the internet. Even for things that are less likely to be purchased online – like sports equipment, white goods, apparel and furniture – the internet can be a useful tool to research products and compare prices,” Ms Doney said. “Consumers are still going to retail stores to make purchases. This indicates that for the moment, the internet will not replace retail stores as consumers look for flexibility in how they are served.”

The study comes after Australia’s two largest supermarket operators, Coles and Woolworths, indicated earlier this year they would strengthen their online shopping capabilities. A UK report by Verdict Research released in June discovered that grocery retail in the UK is set to overtake electricals as the number one sector in e-retail within five years. Australia’s comparatively low figures can be partly explained by the lack of commitment from supermarkets in Australia, with many Australian regions lacking access to online shopping services. Australian consultancy firm Leading Edge did, however, establish via a study released in May that Australians were particularly concerned about buying fresh produce on-line due to the perception that quality could be compromised.

Australia’s two major supermarkets have been coy about their e-retail plans but Woolworths CIO David Beecham has implied that online growth will be pursued with greater vigour. “(Building) a community and trying to connect with your customers has got some real potential,” he told the Australian Financial Review in May. “There are a whole lot of different retail opportunities.”

The Deloitte survey was carried out in early October with 520 Australians participating.