Online giants go head-on into online groceries

Posted by AFN Staff Writers on 8th July 2013

In June 2013, Amazon announced it was expanding its AmazonFresh service to Los Angeles and parts of San Francisco, after testing the concept in Seattle for five years. If the current expansion is a success, Amazon is reportedly looking to expand the service into 20 other locations – including outside the US – in 2014.

This follows Google’s move into the grocery delivery sector, through its Google Shopping Express service in March 2013, with its call for voluntary test households in the San Francisco Bay Area in the city of San Francisco and the Peninsula from San Mateo to San Jose.

“We’re still working out our long-term pricing plan but early testers will get six months of free, unlimited same-day delivery,” said Tom Fallows, Product Management Director, Google Shopping Express. “The pilot will expand as we work out the kinks,” he said.

Online groceries in Australia

In Australia, both major supermarket groups Coles and Woolworths offer an online grocery service where consumers can order food online and have it delivered to their door.

There are other smaller players in the online groceries sector, including the independently-owned Aussie Farmers Direct, which has more than 200 franchisees servicing regional and metropolitan areas in Victoria, New South Wales, ACT, Queensland, South Australia and Western Australia.

Aussie Farmers Direct said research from the University of Washington about the reduction in carbon emissions from online grocery shopping confirms the Company’s own findings.

“Aussie Farmers has worked out that on average each milko keeps more than a hundred cars off the road, saving time and money for Australian shoppers,” Braeden Lord, Aussie Farmers Direct CEO said.

“This is a very significant finding. Obviously we believe online shopping is a contemporary way to shop – the research is proving it to be more sustainable as well,” Mr Lord said.

Online shopping on the rise in Australia

Meanwhile, findings from market research organisation Roy Morgan Research have shown that Food and Beverages are among the top 5 categories by expenditure in online shopping in Australia.

The findings show a clear trend towards internet shopping, with Australians who do not buy something online in an average three month period becoming a minority for the first time in 2013.

Australians aged 14 and over spent $24.3 billion online in the 12 months to March 2013, an increase of 11.9 per cent on the previous year, according to the latest consumer data from Roy Morgan Research. Total retail sales, however, rose only 3.4 per cent in the same period.

According to Roy Morgan Research, the average internet shopper spend $285 online per four week period, with Travel, Entertainment and Leisure, Electronics, Fashion and Food and Beverages the Top 5 categories by expenditure.