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Euromonitor International is pleased to present an interview with Stefan Van Rompaey of RetailDetail.be about the latest online grocery retailing trends in Belgium. Stefan Van Rompaey studied communication sciences at KU Leuven University and has more than 20 years of experience as a chief editor at Belgian retail trade magazines StoreCheck and Retail Update. He joined RetailDetail in December 2015 as chief editor food.
In general, I think the Belgian consumer is lagging behind regarding online shopping, compared to neighbouring countries like the UK, France and the Netherlands. This is due to cultural factors on one hand (a rather conservative, risk-avoiding consumer attitude) and to the fact that retailers have been reluctant to invest heavily in e-commerce on the other hand. Maybe the high store density in the country is another factor. The online market share in FMCG should be somewhere between 1% and 1.5% according to my own estimates (there are no official figures available). Still, there have been some interesting evolutions recently.
Delhaize launched a home delivery service in September 2016. It was an immediate success, beyond expectation, which caused some capacity problems in the beginning. This proves that there is a real demand for delivery, even if the fee is €9.95. Still, the dominant model is click & collect.
Carrefour is expanding its ‘drive’ collect points and now has 152 drives in Belgium. But Carrefour customers can also choose to have their groceries delivered, by PostNL or by Bringr, a peer-to-peer platform developed by Bpost.
Colruyt, the market leader, has already confirmed that it will not invest in a delivery service. It does believe in apps, though. Colruyt has launched a new MyColruyt app that allows customers to do their online shopping at Collect&Go and to organise their shopping list following the routing in their favourite Colruyt store. The retailer has also launched a ‘product finder’ platform with detailed information on every private label food item in the Colruyt assortment. A service for people with food allergies, for example, or for vegans.
Lidl’s e-shop is limited to non-food and wine. Aldi does not operate a webshop in Belgium yet. There is one ‘pure player’ in FMCG e-commerce: Wink, a start-up launched by Louis Delhaize Group. It has only three pick-up points but delivers in regions around, Brussels, Antwerp and Gent. Another interesting trend is the fact that all big food retailers are developing food box concepts, copying the HelloFresh model.
Most retailers are investing in new, enhanced store formats, emphasising experience and convenience, but I don’t think this is a mere reaction to the surge of e-commerce. Rather, it’s a new step in offline competition, partly driven by the arrival of Albert Heijn which raised the bar by opening nicely designed, brand-new stores. Differentiation may also be a way to avoid a senseless price war. New convenience store concepts are adding services and catering options, blurring the border between retail and foodservice. Carrefour Express is doing this, inspired by the French example of Carrefour Bon’App. And Spar-master franchiser Lambrechts has developed the Spar Good Food concept, adding a restaurant or snack bar to the supermarket.
What Amazon is trying to do, I think, is to develop a sort of seamless ‘omnichannel’ retail concept, combining data from online and offline shopping. The concept of ‘data’ is essential: Amazon knows how to handle data. The big question is: what new advantages can e-commerce in food offer consumers, in terms of convenience, assortment, and price?
By investing in physical stores and innovating in new store concepts like Amazon Go, Jeff Bezos is certainly scaring traditional retailers and inciting them to develop innovative store and e-commerce concepts themselves. After all, the supermarket hasn’t changed much since the sixties. The only real innovations since then are barcodes and self-scanning.
Even if online is still a small niche for FMCG, a tipping point where online becomes profitable will inevitably come near. Physical food stores will not disappear, but will need to revise their role in the customer journey. In the long run, there will probably be less stores, smaller stores, and very different stores than the ones we know now. FMCG brand manufacturers will need to decide on their strategies: should they exclusively bet on partnerships with new players like Amazon and Alibaba, or try to develop their own e-commerce channels as well?