Online Retail Model

Issues Relating to Online Grocery Shopping

Vera Jones B.Sc. (Hons) Accounting – Digital Economy Module 2009, Level 5

|Keywords: Online grocery shopping, consumer attitudes, shopping experience |
Introduction

According to Mintel (2009), the UK online grocery market has more than doubled in value during the years 2005-09, influenced by factors such as increased broadband penetration, faster connection speeds, increases in web fluency and the steady increase in online grocers’ geographical coverage and service levels. Nevertheless, online food retailing accounts for only 3% of total UK grocery sales and in general, online shopping for food trails behind that of clothing, footwear and books. Geuens et al (2003) in their study within the Belgian grocery market suggested that consumers perceive shopping for food as a necessity whereas shopping for clothing, for example, is perceived as a relaxing activity. Some sources, such as Aylott and Mitchel (1998) and Huang and Oppewal (2006) propose that grocery shopping online could represent not only an efficient alternative to in-store shopping, but one which also presents a solution to the boredom or ‘chore’ of shopping for groceries. However, the majority of consumers appear still reluctant to use the internet for food shopping, with Mintel (2009) figures reporting just one in nine adults doing so on a regular basis. Indeed, more than half the online population actually never buys groceries online.

This article considers a number of consumer attitudes towards online grocery shopping and aims to provide a better understanding of the reasons for its low level of adoption, recognising some of the diverse views which exist in certain market segments (e.g. those of different age groups, and of regular and non-regular online grocery shoppers). It also touches upon how the leading UK supermarkets try to resolve some negative issues specified by consumers. The article aims to provide a general understanding of consumer attitudes to online grocery shopping, focusing on consumer expectations and concerns regarding the purchasing of food online. It will attempt to achieve these aims by reflecting the broad perspectives which appear to be emerging from the literature. These can be conceptualised as relating to three orientations which have been applied to online grocery shopping; i.e. those emphasising the actual difference in ‘the shopping experience’ of online as opposed to in-store grocery shopping; those highlighting the unique aspects of this form of shopping in comparison to ‘non’ food shopping; and finally, those which tend to focus on the inherent or systemic features of online shopping itself, as applied in this case to the purchase of grocery products.

Online v In Store Experiences

The first of the three broad perspectives which emerge from the literature is the consumer’s perception of the online vs. in-store shopping experience, with particular reference to its application to grocery-oriented shopping. This perspective incorporates issues such as levels of consumer trust, the ability to return unwanted products, access to product information, and the potential for both impulse buying and for social interaction during the shopping experience. It thus considers, essentially, how the experience of the above factors during online grocery shopping compares to those of shopping in-store, and of how any (potentially detrimental) differences between the two may be addressed.

Morganovsky and Cude’s (2000) investigation within the US market has shown that people want an online grocery system to mirror the in-store shopping experience. They expect to be supplied with their favourite brand, their preferred size and the same information which would be present within the in-store system. This comparability of information has also been acknowledged by Mintel (2009), which recognized that the low level of product information provided by online sites is an issue for consumers, and could lead to repeat purchases of familiar products. Rarely is the product information online as complete as that on the product pack in store. For example, in a study by Lim et al (2009) within the US market in 2005 it was found that only half of the online grocery retailers supplied nutritional information and only a few of these specified product origin. Indeed, it appears that consumers expect nutritional, ingredient, cooking and storage information as a matter of course, this lack of such basic information making the online shopping experience currently inferior to that in-store.

Mintel (2009) reflected that nearly half of the adults in the UK perceive ‘top-up’ shopping (i.e. that which requires a visit to an actual store in the event of problems with delivery etc) as being a major issue when shopping for food online. Indeed, a large number (mainly older consumers) appear to be of the view that if top-up shopping is required then it may be just as efficient to purchase everything in-store anyway. As part of their study of UK and Denmark consumer groups, Ramus and Nielsen (2005) stressed that online shoppers appeared not to trust the selection, packaging and transportation of grocery shopping, and thus preferred to buy certain types of products (such as perishables) in store. Hand et al (2009) emphasised that the respondents in their study did not like the way that products were often omitted from delivery, that they considered the offered substitute items as unsuitable and that there was considerable concern regarding product quality. Jelassi and Enders (2008) emphasised the importance of consumers being able to choose suitable substitutes if an item is found to be out of stock, and also to be able to return unsatisfactory items to the driver upon delivery.

A further aspect of the in-store vs. online consideration concerns that of impulse buying. In their study of consumer groups within the United States and Denmark, Ramus and Nielsen (2005) established that some online shoppers felt they were missing out on the special end-of-aisle bargains that were seen in conventional grocery shops. On-pack promotions also struggle to translate to the online medium, as these seem only to work well in conditions where the product picture on the site has sufficiently large formats (Mintel, 2009). Hand et al (2009) acknowledged that consumers do not come across new items and offers online in the same way they would in store. The way supermarkets work online appears to be mainly as providing a list of the items and their prices – which may be satisfying for repeat orders of weekly shopping, but which may lose out on impulse buying (Groucutt and Griseri, 2004). Mintel (2009) reported that a large number of consumers choose food products simply because they look interesting ‘in store’ and that such impulsive shoppers suffer from certain limitations when shopping online. The online retailers could partially solve the issue by suggesting alternative or complementary products. New products could be flagged up or proposed via innovations such as recipe features, meal planners and healthy eating suggestions.

A somewhat different aspect of online grocery shopping emerging from the literature, but one which still concerns the online vs. in-store comparison, relates to the interactive, social, or even ‘fun’ experiences of in-store grocery shopping. Ramus and Nielsen (2005) suggest that for a significant number of online grocery shoppers, the element of fun and enjoyment is lost when shopping from home, but this view was not shared across the whole spectrum. Indeed, a shopping trip to the store is sometimes considered a social event, an opportunity for the family to do something together. For those who live alone, for example, shopping in-store provides an opportunity for interaction as they meet other people. This is seen as a hard to remove barrier when attracting such consumers to online grocery shopping; indeed, Hand et al (2009) point out that consumers find online browsing less satisfactory in terms of social interaction. De Kervenoael et al (2006) proposed that supermarkets could encourage social engagement online by allowing consumers to share their experiences with their fellow shoppers (e.g. share meal recipes).
Chung-Herrera 2005, states that there are two elements of customer service, meeting consumers needs and meeting their expectations, he continues that consumers will tolerate a level of expectation not being met; but are less tolerant when it comes to needs.

Uniqueness of Grocery Shopping

The second of the three broad perspectives emerging from the literature seems to focus on the aspects of shopping for food which make this activity very distinct from that of non-food shopping. These aspects include our ‘sensory’ approach to food shopping, (i.e. the use of not just our sight, but also our sense of touch and smell when choosing food products) and also our awareness of the perishable nature of the product, of our focus on the ‘life’ of the product by both sell-by date and perhaps our own intuitive estimation – e.g. the way in which some people naturally prefer fruit more ‘ripe’ than others.

One of the reasons for the aforementioned physical store ‘top-ups’ seems to be related to consumer attitude towards buying fresh food online. During research conducted on the Belgian market, Geuens et al (2003) found that shoppers have a rather negative approach towards buying fresh food online as they like to see or touch fresh produce prior to actual purchase (which of course is impossible online). Wilson-Jeanselme and Reynolds (2006) pointed out that the quality of fresh products is a major concern especially for those who actually never shop for food online. Jelassi and Enders (2008) suggested that grocery retailers can overcome the issue of the need to touch or see fresh produce by allowing their consumers to use a special note function which enables them to point out preferences regarding their selected products (e.g. that they like their tomatoes ripe). According to Mintel (2009), the leading UK online grocers already provide a facility of free-form notes designed to allow shoppers to leave specific notes as guidance for pickers.

Geuens et al (2003), as part of their study of the Belgium grocery market, addressed the issue of use-by dates. More specifically, they proposed that consumer’s unawareness of use-by dates of online products represents another negative point of buying fresh food online. Research by Hand et al (2009) acknowledged consumer concerns with the sale of perishables being potentially too close to their use-by dates, and also the possibility of them being not properly chilled. According to Mintel (2009) free-form notes also have the potential of being used to enable shoppers to leave a note of the minimum acceptable use-by date. For example, Ocado’s feature “Life Guarantee” and Sainsbury’s “Typical life” both provides consumers with information regarding minimum use-by dates on selected fresh produce in their online stores. Interestingly, it is the consumers in the age group 35-44 and those who regularly shop online who are least worried about not knowing use-by dates.

Systematic Aspects

The third main perspective, referring to the systemic factors which may influence consumer’s perception of and engagement with online grocery shopping includes factors such as delivery charges, delivery times, the amount of time being saved and the amount of time actually being consumed by this mode of shopping.

Several sources have raised the extent and impact of delivery charges together with the need to wait for deliveries as being a major consideration in online grocery shopping. Mintel (2009) found that a large number of adults consider the delivery charges to be unreasonable, and the necessary waiting for delivery via online shopping as inconvenient. Hand et al (2009) said that a considerable number of consumers do indeed suffer a negative experience with late deliveries, and that many also believe there to be systematic errors present in the delivery process, e.g. that two hour delivery slots are too long. Elsewhere, Huang and Oppewal (2006) report that online grocery shoppers place the importance of delivery fees on the same level of significance as the time saved by not having to travel to the store. They found that a fifteen minute difference in the time required to travel to the store had a large impact on the choice between shopping online and offline. Therefore, they suggested that retailers could emphasise the time saving advantages of ordering online rather than to consider reducing delivery charges. According to Mintel (2009), retired consumers, students and those who live within a short distance from supermarkets are least in favour of delivery charges; most under-24s find having to wait for delivery inconvenient, whereas the 35-44 age group perceive both factors of delivery as acceptable.

In addition to the factors of delivery scheduling and costs, the aspects of time spent on ordering (whether perceived as time lost or time saved) also appears to be something of a systemic issue. Internet ordering may reduce the time needed to travel to the physical store but it also increases the time taken to receive goods (Rohm and Swaminathen, 2004). USA consumer market research by Morganovsky and Cude (2000) has demonstrated that for people currently shopping for groceries online, time saving is their primary reason for doing so. In particular, the under 24s age group predominantly view online shopping for groceries to be time consuming (Mintel, 2009). Conversely, Wilson-Jeanselme and Reynolds (2006) focused their research on differences between online and offline consumer perception of the length of ordering time, and found that offline shoppers have been mainly concerned with the time it takes to place an order, generally viewing online shopping to be a time saving activity. On the other hand, regular online shoppers do not appear to have such issue with the time it takes to place an order, but are, however, more concerned with other factors such as the reliability of the delivery.

An additional ‘time’ consideration rests upon that required for online account setup. Jelassi and Enders (2008) established that the initial set-up of supermarket web accounts is viewed by new users as relatively time consuming. This issue is very often overcome by retailers using data already collected through consumers’ club cards. The online shopping list could also be instantly populated with all the products that the customer purchased during previous visits to the actual store. This process also makes it easier and faster for consumers to find the product that they actually need, as they are not required to key each item separately. Ramus and Nielsen (2005) pointed out that regular online shoppers greatly appreciate the advantages of having a basic set up list of groceries as this allows them to check the products which are frequently bought at each shopping event. On the other hand, setting up the basic shopping list is the initial barrier for many new users.

Suggestions for Improvements

Research reports expressing the aforementioned perspectives have included various suggestions for improving the current situation as regards online grocery shopping. Moragnovsky and Cude (2000), for example, emphasised that easier browsing should be one of the focus areas in the development of online grocery shopping; while Mintel (2009) found that one in five consumers who experimented with online shopping for food were discouraged by awkward or unsatisfactory browsing experiences. This seems particularly exacerbated with elderly browsers, where the perception of online shopping appears to become more complicated in line with reduced web fluency. Elsewhere, Jelassi and Enders (2008) argue the case for shoppers to employ several types of function such as that of ‘lunchbox tool’, ’my favourite’, ‘online recipe book’ and ‘organic box’, claiming that such an increase in diversity would increase the usability of internet grocery sites.

According to Mintel (2009) usability issues could be overcome by in-store demonstrations of the grocers’ websites. In fact, Grocer Ocado have just recently introduced the “On the Go” feature, an application for the Apple iPhone which allows consumers to download details of an entire product range on to the phone, thus enabling users to fill their baskets offline and then process the order automatically when the device does go online. This could be perceived as a considerable added benefit when considering that convenience and flexibility were seen as among the most important aspects for online grocery shopping (Hand et al, 2009). Mintel (2009) stressed that being able to customise one’s own online virtual store (with the aim of cutting out unwanted clutter and improving relevance) could be considered a great advantage when shopping online, as such customization is not possible in a real supermarket. One of the examples of how to reduce the need to wait at home for delivery is provided in the study of Kämäräinen et al (2001), which explains the use of reception boxes in Finland and the USA where the shopping can be delivered to locked refrigerated boxes within the household.

Conclusion

This review has attempted to describe the current situation and trends in online grocery shopping framed largely within the three broad perspectives emerging from the literature, i.e. the experience of online as opposed to in-store grocery shopping, the specific or even unique aspects of grocery as opposed to ‘non-food‘ shopping, and finally on the systemic features of the process itself. The above have clearly shown that consumers’ attitudes towards online grocery shopping are currently somewhat negative, and that consumer views differ according to factors such as consumers’ age and their frequency of use (or indeed of non-use). Some consumer views also appear rather contradictory, e.g. some people find shopping online time saving while for others it is time consuming. Another such contradiction concerns the online features of ‘repeat’ or ‘favourite items’, which seem to reduce the time spent on ordering, but at the same time may serve to exacerbate the issue of attracting the consumers’ attention to new or different products. Mintel (2009) acknowledged that the groups most positive about online grocery shopping appear to be the under 45s and families with children. The most negative, or ‘store-engaged’ consumers, seem to be those over 45 and retired. Further research could concentrate on the actual improvements which consumers would like to see and which would encourage them to start shopping – or to shop more often - online for food (e.g. questions could ascertain whether reducing or scrapping delivery charges would definitely encourage such shopping). However, there does not seem to be any unified solution to such issues with which consumers are concerned when shopping for food and additionally, one has to consider that the store itself does not always seem interested in a major shift from in-store to online shopping - quite possibly due to their view that, as the UK online grocery market is actually dominated by in-store based grocers it may not be in their best interest if consumers move wholesale from an in-store channel to one purely online (Mintel, 2009).

References

AYLOTT, R. and MITCHELL, V. 1998. An exploratory study of grocery shopping stressors. International Journal of Retail & Distribution Management. 26(9), pp. 362-373.

DE KERVENOAEL, R., SOOPRAMANIEN, D., ELMS, J. and HALLSWORTH, A. 2006. Exploring value through integrated service solutions: The case of e-grocery shopping. 16(2), pp. 185-202.

GROUCUTT, J. and GRISERI, P. 2004. Mastering e-Business. Basingstoke: Palgrave Macmillan Ltd.

GEUENS, M., BRENGMAN, M. and S’JEGERS, R. 2003. Food retailing, now and in the future. A consumer perspective. Journal of Retailing and Consumer Services. 10(4), pp. 241-251.

HAND, C., RILEY, F. D., HARRIS, P. SINGH, J. and RETTIE, R. 2009. Online grocery shopping: the influence of situational factors. European Journal of Marketing. 43(9/10), pp. 1205-1219.

HUANG, Y. and OPPEWAL, H. 2006. Why consumers hesitate to shop online: An experimental choice analysis of grocery shopping and the role of delivery fees. International Journal of Retail & Distribution Management. 34(4/5), pp. 334-353.

JELASSI, T. and ENDERS, A. 2008. Strategies for e-Business: Creating Value through Electronic and Mobile Commerce: concepts and cases. 2nd edn. London: Financial Times Prentice Hall.

KÄMÄRÄINEN, V., SARANEN, J. and HOLMSTRÖM, J. 2001. The reception box impact on home delivery efficiency in the e-grocery business. International Journal of Physical Distribution & Logistics. 31(6), pp. 414-426.

LIM, H., WIDDOWS, R. and HOOKER, N. H. 2009. Web content analysis of e-grocery retailers: a longitudinal study. International Journal of Retail & Distribution Management. 37(10),pp. 839-851.

MINTEL. 2009. Online Grocery Retailing - UK – September 2009. [WWW] http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=418439. (10 December 2009).

MORGANOVSKY, M. A. and CUDE, B. J. 2000. Consumer response to online grocery shopping. International Journal of Retail & Distribution Management. 28(1), pp. 17-26.

RAMUS, K. and NIELSEN, N. A. 2005. Online grocery retailing: what do consumers think? Internet Research. 15(3), pp. 335-352.

ROHM, A. J. and SWAMINATHAN, V. 2004. A typology of online shoppers based on shopping motivations. Journal of Business Research. 57(7), pp. 748-757.

WILSON-JEANSELME, M. and REYNOLDS, J. 2006. Understanding shoppers’ expectation of online grocery retailing. International Journal of Retail & Distribution Management. 34(7), pp. 529-540.

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References: AYLOTT, R. and MITCHELL, V. 1998. An exploratory study of grocery shopping stressors. International Journal of Retail & Distribution Management. 26(9), pp. 362-373. DE KERVENOAEL, R., SOOPRAMANIEN, D., ELMS, J. and HALLSWORTH, A. 2006. Exploring value through integrated service solutions: The case of e-grocery shopping. 16(2), pp. 185-202. GROUCUTT, J. and GRISERI, P. 2004. Mastering e-Business. Basingstoke: Palgrave Macmillan Ltd. GEUENS, M., BRENGMAN, M. and S’JEGERS, R. 2003. Food retailing, now and in the future. A consumer perspective. Journal of Retailing and Consumer Services. 10(4), pp. 241-251. HAND, C., RILEY, F. D., HARRIS, P. SINGH, J. and RETTIE, R. 2009. Online grocery shopping: the influence of situational factors. European Journal of Marketing. 43(9/10), pp. 1205-1219. HUANG, Y. and OPPEWAL, H. 2006. Why consumers hesitate to shop online: An experimental choice analysis of grocery shopping and the role of delivery fees. International Journal of Retail & Distribution Management. 34(4/5), pp. 334-353. JELASSI, T. and ENDERS, A. 2008. Strategies for e-Business: Creating Value through Electronic and Mobile Commerce: concepts and cases. 2nd edn. London: Financial Times Prentice Hall. KÄMÄRÄINEN, V., SARANEN, J. and HOLMSTRÖM, J. 2001. The reception box impact on home delivery efficiency in the e-grocery business. International Journal of Physical Distribution & Logistics. 31(6), pp. 414-426. LIM, H., WIDDOWS, R. and HOOKER, N. H. 2009. Web content analysis of e-grocery retailers: a longitudinal study. International Journal of Retail & Distribution Management. 37(10),pp. 839-851. MINTEL. 2009. Online Grocery Retailing - UK – September 2009. [WWW] http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=418439. (10 December 2009). MORGANOVSKY, M. A. and CUDE, B. J. 2000. Consumer response to online grocery shopping. International Journal of Retail & Distribution Management. 28(1), pp. 17-26. RAMUS, K. and NIELSEN, N. A. 2005. Online grocery retailing: what do consumers think? Internet Research. 15(3), pp. 335-352. ROHM, A. J. and SWAMINATHAN, V. 2004. A typology of online shoppers based on shopping motivations. Journal of Business Research. 57(7), pp. 748-757. WILSON-JEANSELME, M. and REYNOLDS, J. 2006. Understanding shoppers’ expectation of online grocery retailing. International Journal of Retail & Distribution Management. 34(7), pp. 529-540.