Delivering fresh products is really expensive because it takes an unbelievable amount of time and effort. Fruit, meat and milk need to be fresh and, if possible, delivered to the customer the same day. Even though businesses have minimum order amounts and delivery costs, these are not nearly enough to cover the costs of the logistics, personnel and IT. The Austrian supermarket chain Spar, for example, says that less than one percent of its sales is currently generated online. Spar CEO Gerhard Drexel is projecting this to grow to four percent at the most. In the UK, six percent of food products are already sold online, and the British industry association IGD is projecting this figure will double by 2019. Around the world, the trend is unstoppable. Which is why the ‘trial and error’ phase in Austria should be taken advantage of. Supermarkets that miss out on establishing their e-commerce business today will struggle in the future. Because even if there isn’t much going on with digital stores right now, there is no way of getting around them. Even if slightly modified form of stationary retailing continues, the advantage of convenience that online shopping offers in the food segment cannot be ignored. And it is exactly that convenience which more and more people are coming to appreciate.
Even Amazon, which already has the logistics required as well as a large and loyal customer base, is still fine-tuning its food delivery service to make it more cost efficient – in some US cities and in England. Amazon’s Pantry Service has been offering household products for some time now, but fresh or frozen products are new territory for the online retailer. That’s why it has made a deal with Britain’s fourth-biggest supermarket chain, Morrisons, from which it will procure products. In return, Morrisons doesn’t need to establish its own logistics network – a win-win situation.