The U.K. is once again carrying the banner in yet another field: the grocery industry. The country has always been a pioneer in many areas, however, we can say that the demographic leaves no room for surprises, which we will cover more deeply in the next paragraphs. On the grocery front, the younger generations seem deeply invested in the future of grocery; also known as last-mile grocery delivery.
Last-mile delivery, or express grocery delivery if you may, is one of the fastest-growing trends in the industry. Particularly during the COVID-19 pandemic, the demand for home deliveries has skyrocketed.
Source: Financial Times
We had been seeing eastern European countries testing the new model, but in the world-leading countries, the U.K. was the exception. Some of the major grocery retailers like Tesco had begun offering under-one-hour grocery deliveries long before COVID-19 hit. When we look at the chart above, we see that there was the biggest rise in demand in the U.K. The convenience that the grocers provided was probably the main factor why the British population was the fastest to adapt to the home delivery model during the first months of the pandemic. According to The Guardian, the new way of shopping is here to stay in the U.K., since even the older generations of shoppers prefer the new model to the old.**
Source: The Guardian
Morgan Stanley’s 2016 and 2017 surveys show us that the biggest reason consumers avoid online shopping is that they want to make sure they get fresh produce. As everybody knows, online grocery used to take a long time, which gave consumers the sense that their goods had expired. Express grocery delivery solves two of the biggest concerns of the traditional shopper; the order arrives quickly, and it is a massive winning point that there is no need to leave the house. On top of that, express delivery gives a sense of freshness.
If you think it’s too early to talk about drones, you may be wrong. FMCG giant Tesco is beginning to test what Amazon aims for; drone delivery. Sure, this operation is extremely pricy and risky, but for Tesco, the risk seems worth taking.
Global projections in the express e-commerce arena show us that the U.K. is going to be one of the first countries to adapt to next-gen shopping. Still, an article by The Financial Times states that the new model is not satisfyingly profitable for businesses. If you’ve got the same concerns, you are in luck. We have partnered with many brands that have managed to make it in their homeland. Turkey, for example, is one of the surprising countries where express grocery delivery applications have managed to grow immensely. We think that following the same patterns, U.K. start-ups can be more profitable than they expect. Let’s look at some hopeful insights from eastern European countries and how they managed to make it so successful.
Although building a fully functioning last-mile grocery delivery operation is pricey, with the right moves it pays for itself. According to Statista’s numbers, express order delivery generates 11$ more profit per customer. One of the biggest reasons behind this money-making system is the implementation of a basket limit. To reach the minimum basket limit, which should be a reasonable amount, customers prefer buying things they don’t need over taking a trip to the store later. Since the U.K. is a competitive ground for express grocery delivery, keeping an eye on the competitors’ basket limits is essential.
Customers love the feeling of knowing that they could get what they ordered in under an hour, even if they don’t use express shopping. Gartner’s research states that having the ultra-fast delivery option improves customer satisfaction by 18%.
The reason there are more grocers offering express delivery every day is that the operation is becoming dramatically easier to build. There are many ways to go about it and you can see some of the working models in this article. Plus, with today’s technology, nobody needs to code a platform from scratch. With our express e-commerce platform, you can have all of the latest features from day one. To see what our ready-made and customizable module offers, visit our Ubimecs Express Module page.