Online retail – how is it changing the supply chain?

‘Power to the people’ – was famously a song written by the late, great John Lennon, as well as the political slogan of 1970’s TV sitcom character Citizen Smith and the Tooting Popular Front. 

More recently, the slogan has even been used in advertising. But, could this slogan now have relevance in the UK grocery market?

The retail market in the UK has changed drastically with the introduction of online shopping and this platform has fundamentally changed the way we shop.

The overall UK grocery market is now valued at £117bn, according to the latest data from the British Retail Consortium (BRC).

Of that number, the online grocery market makes up £8.9bn – a small but significant number that is likely to increase.

With the proliferation of technology over the past 21 years since the launch of online shopping giants Amazon and eBay, we are now used to being able to shop when and wherever we want. We no longer have the constraints of wires and plugs with handheld devices becoming a common medium for us browse the web and shop at our leisure.

We are now becoming more comfortable shopping online. The rise in online shopping has caused businesses to react and adapt to the growing demand for digital buying with some shaking up the typical supply chain of producer, manufacturer, distributer and retailer.

This year will see the launch of a new online grocery service, Shobr. The new service offered by the Danish company will see the typical supply chain being turned on its head, as suppliers will offer their branded goods straight to consumers.

The growing market isn’t limited to Denmark. Asia has been quick to adapt to the growing trend, with direct-selling platforms Alibaba and Gmarket dominating ecommerce in markets like China and Korea. With a growing number of brands signing up to these platforms, such as Unilever, Nestle and even Sainsbury’s own-label lines, the steady growth of high-profile brands will put pressure on other big brands to join.

Is this the beginning of the end for our typical relationship with retailers? Only time will tell.

But one thing is for certain, this new online format will put pressure on retailers to react, allowing consumers to have more choice in where they shop and the prices they pay.

So in the words of John Lennon:

‘Say you want a revolution

We better get on right away

Well you get on your feet

And out on the street.’

Only this time, instead of ‘the street’, people will start a revolution online. Technology, eh. Who knew?

Pelican Communications are specialists in the environment, food and drink, outdoor and leisure and packaging sectors and offer a range of services such as media relations, brand management, event management and people development. Contact us for marketing and communications expertise.