Online consumer spending predicted to skyrocket: Nielsen

Online consumer spending is predicted to inject up to $2 billion of incremental sales into the Australian grocery industry over the next five years, Nielsen research has shown.

The findings are a result of grocery e-commerce growing seven times faster than the total market.

Findings from Nielsen’s Homescan research reveals the ’20-20-20’ growth opportunity that grocery e-commerce represents to the Australian industry, which includes 20 per cent of the percentage of households who currently buy online grocery products, 20 per cent of the current rate of annual sales growth, and 20 per cent the expected share of $10.6 billion growth prize for the grocery industry over the next five years.

“Up until now, it has been hard to find examples of brands and retailers in the Australian fast-moving consumer goods (FMCG) industry who have mastered their offer in the online grocery space – the majority are still in the exploratory phase, testing different tactics and strategies to understand what works best in this market,” says Kosta Conomos, Executive Director, Retail Industry Group at Nielsen Australia.

One in four Australians said they order grocery products online and more than half (55 per cent) are willing to do so in the future.

“Australian shoppers are growing accustomed to the benefits of digital in other retail settings and are beginning to expect them in grocery as well,” Kosta says. “Retailers are now facing unprecedented pressure to maintain profit margins by keeping up with these increasingly demanding, empowered and connected consumers. Those that are winning in this space are leveraging technology to enhance the overall shopping experience and meet consumers’ evolving desire.”

While grocery e-commerce is still relatively small in Australia, accounting for just over 2 per cent of total grocery sales, it is growing seven times faster than the total market.

“With a substantial growth prize up for grabs, a strong focus on the dynamics and drivers of online trade is a sure-fire way for retailers and manufacturers to secure their slice of this lucrative pie,” Kosta says.

The Nielsen Grocery eCommerce report will be available in early 2017.

Nielsen Holdings is a global performance management company that provides a comprehensive understanding of what consumers watch and buy.

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