Supermarkets face online exodus

Supermarkets are failing to retain their online customers and need to find more imaginative ways of trying to appeal to them, according to a new study.
A team from Kingston University’s Faculty of Business and Law says that many people switch to online shopping but then abandon it, citing concerns over late deliveries, sell-by dates and substitute items, among other issues.
“When someone starts buying books or music online they don’t normally stop and go back to bookshops or CD sellers. But that’s exactly what is happening with many online grocery shoppers,” one of the researchers, Dr Chris Hand, said.
Although the past few years have seen significant growth, online grocery purchases only account for around 3.2% of total grocery sales in the UK, whereas overall Internet sales account for nearly 10% of all retail sales, according to figures published in November 2010. “Even though the UK online market is regarded as the most advanced in the world, online groceries are still only a niche market,” Dr Francesca Dall’Olmo Riley from the Kingston Business School team added.
Besides improving the quality of their service, online supermarkets should try to tie-in customers, for example with a monthly subscription to the service instead of delivery charges or special offers available only to online customers, the team suggests.
In the first stage of their research, the Kingston team conducted focus groups to discover the reasons for the adoption – and discontinuation – of online food shopping. Reasons for switching to the Web included broken limbs, the arrival of children, moving to a new area where their favourite supermarket didn’t have a store nearby or elderly parents becoming housebound.
“We found that these ‘triggers’ often led to just a temporary change in behaviour,” Dr Dall’Olmo Riley said. “The adoption decision triggered by a specific situation is easily reversed when the situation changes again”.
Although these life situation ‘triggers’ are outside the supermarkets’ control, the researchers believe there are steps retailers can take to try to retain those online customers who are dissatisfied with the grocery delivery service.
“Many respondents felt online grocery providers could not be trusted to be reliable because products were regularly omitted from their delivery and substitute items were often considered unsuitable. They also complained about late deliveries, bad picking and packing of goods and perishables being too near sell-by dates.”
These conclusions were reinforced by a postal survey of more than 1,100 online shoppers. “One finding that came over very clearly was that Internet and supermarket shopping are not mutually exclusive – online shopping is complementary rather than seen as a substitute,” Dr Dall’Olmo Riley said. “Reverting back to the traditional mode of shopping is easy because shoppers never completely stop shopping in traditional stores.”

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