Click and collect services have been a major driver behind the rapid growth of the online grocery industry according to industry research company IBISWorld.
Revenue from bricks and mortar supermarkets is expected to expand by 2.1 per cent while the online grocery industry is expected to expand at an annualised 21.7 per cent over the same period.
According to IBISWorld, the Online Grocery Sales industry is expected to generate $3.3 billion in revenue in 2018-19, while bricks and mortar supermarkets are expected to generate $103.4 billion.
With a steady rise in the proportion of Australian shoppers who purchase groceries online, the introduction of click and collect services is expected to open up the online grocery shopping market, fuelling rapid growth.
“Click and collect services have driven this expansion by growing consumers’ average expenditure per online shop. Customers can now check all their items are included and of a sufficient quality, as well as pick up any forgotten items or impulse purchases,” IBISWorld senior industry analyst Tom Youl said.
Coles and Woolworths have both reportedly invested heavily in infrastructure to facilitate click and collect services in recent years, with the two companies adding click and collect to almost 1400 supermarkets in 2017-18.
As of 2018-19, Woolworths is estimated to hold 45.3 per cent of the Online Grocery Sales industry to Coles’ 30.9 per cent.
“While this edge is partly reflective of consumers’ preference between the two companies, Woolworths has also benefited from first mover advantage in click and collect store rollouts,” Youl said.
“However, Coles has fought back, responding to consumer demand by introducing a range of click and collect locations,” Youl said. “Coles currently offers click and collect in over 1200 locations, which is about 200 more than Woolworths.”
According to IBISWorld, as a standalone entity, Coles Group is off to a sluggish start since demerging from Wesfarmers in November 2018 with the company continuing to lose ground to major competitor Woolworths.
