In recent years, the number of retail outlets offering the delivery of grocery items in one hour or less – otherwise known as on-demand delivery – has accelerated.
There have been a number of reasons for this, including rapid technology advances and more advanced automation processes.
The European on-demand grocery market is already a $11.19 billion (€10.35 billion) business, according to Statista, and it is expected to grow to $16.54 billion (€15.3 billion) by 2029, at an annual growth rate (CAGR) of 8.13%.
The dynamic between consumers and supermarkets shifted radically during the COVID pandemic, when delivery of groceries to the home became essential. The pandemic may now be behind us, but consumer demand – and expectations – when it comes to speedy service remains.
‘Rapid Evolution’
Just Eat Takeaway.com, in partnership with PA Consulting, has just released a new report, The Rapid Evolution: The transformative future of on-demand grocery delivery and beyond, a survey of 4,000 people in four markets (the UK, Germany, the Netherlands and Spain), to examine this growing trend and look at how on-demand has shifted from the foodservice to the retail arena.
“It was not a surprise to see a welcome shift to grocery from the large base of restaurants and takeaways that we have on the platform,” Andrew Kenny, Just Eat Takeaway.com’s chief commercial officer, told ESM.
“Consumers seem to be aware about how this proposition has the ability to really change their lives.”
Types Of Shopper
The report distinguishes between two types of shopper in the on-demand demographic: Speed Seekers and Pacey Prospects.
Speed Seekers are the ‘early adopters’ in the on-demand delivery world and have ordered groceries for on-demand delivery at least once in the last six months.
Elsewhere, Pacey Prospects are people who are open to on-demand delivery, but have not yet tried it.
Interestingly, the report states that the on-demand revolution could help, rather than hinder, everyday high-street retailers.
For example, 76% of Speed Seekers said that on-demand groceries are an addition, on top of their regular shopping routine, not a substitute for it, while 66% said that they will buy more groceries now, with on-demand delivery as an option.
Developing Markets
The report indicates that developing nations like China, India and Brazil are ahead of the convenience curve, with on-demand grocery delivery becoming a fixture in urban hubs.
“If we look around the world, and certainly in the markets that we operate, the most advanced are markets like North America – the US and Canada – the UK, and Australia,” Kenny explained. “They have really advanced very, very quickly in the on-demand grocery space and are moving into new verticals, whether that’s pharmacy or pet care or consumer products, but that is, in many ways, dwarfed by what some of the players are seeing in these very large populations in markets like India, China and Brazil.
“The labour cost and the cost to serve those customers is obviously significantly lower in those markets, which may increase or speed up the ability to serve more customers quickly, at the right price points.”
Societal Impact
The report also suggests that the prevalence of on-demand shopping could have wider benefits for society overall.
For example, people who are homebound due to disability or illness will have more options and greater choice while shopping, while food waste – a major issue for supermarkets – could also be reduced because consumers would buy produce as and when they need it – and that’s to say nothing of the impact on work-life balance.
“It comes out very clearly in the report that people live extremely hectic lifestyles, juggling a lot of different priorities, from work to family life, and everything that goes with that,” said Kenny.
“There is a sense that these on-demand delivery services in grocery, but also more and more in other retail channels, are giving precious time back to people, allowing them to be more selective about how they spend their day.”
