Competition drives growth in online grocery shopping – Customers seek ease in everyday life

The number of regular online purchasers of daily consumer goods has more than doubled compared to the time just before the COVID-19 pandemic started, and the Finnish Commerce Federation estimates that sales already account for about three per cent of the total market. In four years’ time, the share is expected to exceed five per cent, which is almost as much as in Sweden at present.

In addition to the online sales of daily consumer goods, the number of pickup and home delivery orders from restaurants has increased rapidly. However, online grocery shopping seems to have taken a much bigger leap forward than meal orders, which is why it is no wonder that various service platforms, such as Wolt, are expanding to online grocery stores as well.

At the same time, the daily consumer goods trade is embracing the operating concept of restaurants and competing more strongly with, for example, lunch restaurants.

“For a customer working from home, there is no big difference between ordering a lunch from a restaurant or a few restaurant-grade lunches from a grocery store at the beginning of the week,” says Jaana Kurjenoja, Chief Economist at the Finnish Commerce Federation.

With new practices and companies, online grocery shopping has also become a more interesting area for consumers.

“The competition has really just begun in the industry,” Kurjenoja says.

Online grocery shopping saves time and effort, particularly for families with children

According to Kantar TNS’s consumer survey commissioned by the Finnish Commerce Federation, families with children buy daily consumer goods online more frequently than others, and they are also more interested in trying it out than others.

Consumers buy daily consumer goods online primarily for their everyday needs to save time and effort, which is particularly important for families with children. For people over the age of 65, the main reason for buying daily consumer goods online is the desire to avoid contracting COVID-19 during the pandemic.

The ease or convenience of shopping in physical stores is the most common reason why there is no need for online grocery shopping. The disadvantages associated with online grocery shopping are that customers cannot choose the products or substitutes themselves and that the collection or transport fees are too expensive.

The digital daily consumer goods market is just starting to take shape

The online store for buying daily consumer goods is first and foremost selected based on price, previous experience and loyalty programmes. However, the selection criteria vary considerably from one customer group to another. For example, the willingness to experiment steers the customer base of the so-called challengers more than that of traditional operators in the daily consumer goods trade.

“The willingness to experiment identified in the customer base of challenger companies indicates that the digital daily consumer goods market in Finland will still be strongly taking shape in the coming years,” Kurjenoja estimates.

During this year, the most commonly used online stores for buying daily consumer goods were S-kaupat.fi (foodie.fi), K-Ruoka.fi and Fiksuruoka.fi.

Finns differ from their neighbours as grocery store customers

According to Statista’s international consumer survey, Finns usually differ from other northern Europeans, such as Swedes, Germans or Russians, as grocery store customers.

Finns place more value on the fast and easy preparation of food as well as the availability of ingredients in supermarkets than the comparison countries. When it comes to grocery shopping, low price is a much more important criterion for Finns than for Swedes, Germans or Russians, and quality is clearly less important.

Despite the importance of prices, one fifth of Finns also include premium food brands in their shopping baskets, which is more than the corresponding share of Germans and Russians.

“Even though Finns seem to be very price-driven when it comes to groceries and choices of online grocery stores, this cannot be generalised across the entire customer base. And, according to our study, for example before Christmas, the most important factor in choosing an online store is the selection,” Kurjenoja emphasises.

Almost half of customers would also like to buy mild alcoholic beverages from online stores

According to a study published now by the Finnish Commerce Federation, daily customer goods are purchased online particularly to make everyday life easier, and almost half of customers would like to add mild alcoholic beverages containing up to 5.5% alcohol by volume to their shopping baskets.

The ban on the sales of mild alcoholic beverages containing up to 5.5% alcohol by volume in Finnish online grocery stores is often defended on the grounds of difficulties in age limit control.

“However, this is an excuse, as it is perfectly possible to arrange age limit controls both when picking up purchases and when delivering them home,” says Mari Kiviniemi, Managing Director of the Finnish Commerce Federation.

Kiviniemi continues that the development of the market, companies and customer service should not be restricted and slowed down in order to protect state monopolies, such as the monopolies on pharmacy licensing or alcohol sales.

The main sources used in the study include the Statista Global Consumer Survey (sample size of 12,389 for Finland), a consumer survey conducted by Kantar TNS (sample size of 2,156 for the whole population and 1,460 for users of online grocery stores only) as well as companies’ financial statements and annual reports. The market estimates, forecasts and data analyses have been carried out by the Finnish Commerce Federation.

For further information, please contact:

Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation, tel. +358 (0)40 820 5378, jaana.kurjenoja(at)kauppa.fi

Mari Kiviniemi, Managing Director, Finnish Commerce Federation, tel. +358 (0)50 511 3189, mari.kiviniemi(at)kauppa.fi