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    Expert Column: How Multichannel Shopping is Changing the Grocery Industry

    Plan now for the shift to online purchasing

    By Julian Highley, dunnhumby

    There's no doubt that the online channel is increasing its presence in the grocery sector. There's also no question that it's taken a long time. While 83 percent of leisure flights were booked online in 2014, Google's Consumer Barometer found, less than 1 percent of grocery sales were, according to Planet Retail. And with Bloomberg Businessweek estimating that online's share of the grocery business could reach 11 percent by 2023, it's understandable to think there's still considerable time before those in the grocery space need to turn their focus toward online shopping.

    However, our recent research has found that the online channel is going to have a profound effect on grocery brands and retailers, with 50 percent of sales in key categories being sold online well before 2023. Planning for this shift needs to start now.

    Key Categories for Growth

    Established markets' total online sales account for less than 5 percent of total grocery, yet categories such as frozen meat, canned food, baby food and care, and breakfast cereals are seeing almost 20 percent of their sales through online. With online annual growth rates in excess of 20 percent, one-third to half of all sales could easily be online for these categories by 2019. For the most part, the shift from in-store to the online channel is a zero-sum game. Retailers will need to ensure that they have an online presence to respond to this dynamic. Within the categories that are already well established online, there are a significant numbers of brands that have close to 40 percent of their sales from online today. In a few years, there will be grocery brands that see the majority of their sales coming from online grocery shopping.

    By Julian Highley, dunnhumby
    • About Julian Highley Julian Highley, global capability director and head of global trends at London-based dunnhumby, is responsible for empowering client strategy with a keen understanding of what customers feel, think and do. Highley influences strategy at the executive level across a number of retail and brand partners, using his fascination for marketing science and customer behavior.

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