Tim Lark blog: Internet Shopping

A guest column by Tim Lark, Service Innovation Group

Diageo’s futures director has been in the press recently discussing the future of the brand and how technology is impacting on how we shop. He brings up the question of whether supermarkets will still exist in a decade. He didn’t know the answer – but does anyone? A recent report in the Guardian confirmed that online grocery shopping is big business, and it is expected to get bigger: according to IGD, the market will almost double in value by 2016 to £11.2bn. Add the rise in m-commerce to the picture and it’s sure to increase even more.

Despite the rise in online, there will always be a need for physical shops. The supermarket still has a major place in how we buy food and accounts for the biggest proportion of grocery spending. The weekly shop is not dead and it remains one of the most convenient ways a family can buy their groceries. Many of us are not organised enough to shop on line – and there is still a fair percentage of the population that simply isn’t tech savvy, or just prefers to choose their products in person. That said, m-commerce is predicted to impact on four key industries and retail is one of them as consumers are given the ability to place and pay for orders on the go. Perhaps even the most disorganised among us will be placing our weekly shop on the train and picking it up on our way home?

This shift is already impacting on ‘the big four’  but as online increases will it simply result in the cash moving from a physical store to  the company’s online provision? Will consumer chose to do a fortnightly or monthly online shop and then ‘top up shops’ in the smaller, convenience stores run by the likes of the Co-op?

According to a report in the Evening Standard, the latest five-year industry forecast by IGD, the industry research body states that over the next five years spending in superstores (those larger than 25,000 sq ft) will fall by 2.9 per cent. That might not sound a lot, but it equates to a loss of £2.1bn a year.

The grocery shopping landscape is changing and no-one really knows how it will look in the future. The only thing I can definitely predict is that we as an industry will have to be flexible and adapt with it

Tim Lark, MD, Service Innovation group