According to eMarketer, U.K. e-commerce grocery sales are set to increase by around 50% – from $43 billion to $63 billion between 2021 and 2025; it is a challenge to find analysts so bullish about other areas of the economy. And it also puts into context the reason for so much investment and innovation, not to mention competition, in the grocery shopping sector. Some of those startups at the forefront of this are the focus of our brand new report.
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Promising supermarket deliveries to your door in as little as 10 minutes, the ‘instant’ delivery grocery app trend in the U.K. is hard to ignore. Indeed, McKinsey research from March 2021 shows that grocery delivery was top of the list in terms of increased service usage since the pandemic, matched only by food. And having gained popularity through lockdowns, these apps have remained a feature of the U.K. shopping economy in major cities ever since.
One such startup, Getir, was valued at $7.5 billion in June 2021. Another, Gopuff announced a $1 billion funding round around the same time, and a valuation of twice that. And these are just two of several competing in this space. Waiting in the wings, legacy retailers including supermarkets and e-commerce players are also getting in on the act.
Some are even clubbing together to compete against newer entrants – as in September 2021, when Deliveroo launched a rapid grocery delivery service named Hop, in partnership with supermarket Morrisons. In fact, this is just one of many such partnerships, with groceries delivery contributing 7% of Deliveroo’s revenue in the first half of the year.
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It’s clearly a fast-moving space, so what are the opportunities and threats for retailers, agencies and FMCG firms alike? How should they think of this emerging sector, and where does it fit in the overall marketplace? With this report, InMobi used its own in-house research and survey tool InMobi Pulse to gauge the opinions of 1,000 city dwellers in the U.K.
In this report, you will learn:
- How do the public, and more specifically app customers, think of ‘instant’ grocery shopping right now?
- What have they replaced, if anything, and what are the most important aspects of such services?
- How often are customers using these services? For those not yet using them, how aware of them are they?
Corner Shop Competition: Instant delivery grocery apps are a potential threat to corner shops (and maybe even supermarkets) with 35% of users saying buying via these apps is replacing their corner shop visits. Additionally, 29% said the same thing about their weekly visit to the supermarket.
Retail Challenge or Opportunity?: That said, when asked if they would use an established supermarket brand offering 'instant' services over one of the newer entrants to the market, 75% said yes while 65% said the same if it were an established online delivery company like Amazon doing the delivery.
Age and Demographic Awareness: Typically seen as targeting younger age groups and consumers, 45–54-year-olds were surprisingly more aware of instant delivery services than some younger groups. Male respondents also showed greater awareness in general and across all individual brands in the space. As we outline in the report, both data points seem to point to the successes thus far, as well as untapped opportunities for rapid grocery delivery in the U.K.
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