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The Online Opportunity for Fresh Produce in Australia
A man with his son in a grocery store
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The Online Opportunity for Fresh Produce in Australia

Traditional online categories including travel, event tickets and durable goods continue to gain ground around the world; however, the online grocery sector has also started to show strong growth as the level of trust, ease and willingness to purchase increases among online shoppers.

Nielsen’s Global Connected Commerce Report revealed that online shopping for fresh foods (produce, meat, seafood and dairy) recorded a two percentage point increase from 24% of internet users globally in 2017 to 26% in 2018. Asia-Pacific, a key export market for Australian produce, has the fastest rate of growth and the highest proportion of shoppers buying fresh online compared to other global regions. In 2018, 40% of internet users across Asia-Pacific purchased fresh categories online, up from 35% in 2017.

When looking at the countries that have shown the biggest percentage point increase in online shoppers for fresh groceries over the past year, Australia ranked fifth. And when it comes to horticulture specifically (fresh fruits and vegetables and nuts), 15.9% of Australian households made at least one purchase online in the last 12 months.

THE IMPORTANCE OF AN OMNI-CHANNEL STRATEGY FOR FRESH

While e-commerce continues to establish itself in the grocery sector, the role of traditional bricks and mortar stores, cannot be discounted. Across 18 categories surveyed globally, fresh is the category most likely to be purchased primarily in-store (48% of internet users preferring to buy in this channel), with the remaining 52% globally saying that they are more likely to purchase either online, or across both channels (online and in-store).

In Australia, the preference for physical stores is well above the global average, with 61% of shoppers saying that they prefer to buy their fresh and household groceries at a physical store. This highlights that retailers who deliver value to customers in the form of competitive prices, a product range tailored to their needs, and an enjoyable shopping experience will continue to hold a firm share of consumers’ spend.

When looking at the differences in what fresh produce is most purchased across the total market versus online; berries, bananas and tomatoes are the largest fruit and vegetable categories across all channels. While hardier items, like apples and potatoes, top the list online in terms of dollar sales

Over the next few years, as consumers increasingly embrace the convenience and efficiency of online shopping, we would expect to see some preferences shift. There is a sizeable group (23% of Australian internet users) who are not currently purchasing their groceries online but who are considering to do so in the near future.

To win in the online space, it is important to understand the size and scope of the online opportunity in the fresh sector; and look at tactics that encourage consumers to buy online and consider ways to remove purchase barriers. Key enablers for accelerating the growth of fresh online include offering money-back-guarantees if the product does not meet expectations, free delivery for orders, and giving shoppers the confidence that the online channel can deliver the same quality and ripeness that they would pick themselves when shopping in store.

An omni-channel strategy is essential for retailers and suppliers aiming to capture future growth both in Australia and across the Asia-Pacific; and to succeed, it is important to understand how consumers shop both digitally and in-store.