In recent years, the number of retail points offering food delivery within an hour or less, known as on-demand delivery, has increased, according to a report cited by Euractiv.

Multiple Reasons

There are several reasons for this, including rapid technological advances and more advanced automation processes.

The European on-demand food market is already a $11.19 billion (€10.35 billion) business, according to Statista, and is expected to grow to $16.54 billion (€15.3 billion) by 2029, at a compound annual growth rate (CAGR) of 8.13%.

The dynamics between consumers and supermarkets changed radically during the COVID-19 pandemic, when home food delivery became essential. The pandemic may now be behind us, but the demand – and expectations – for fast consumer services remain.

"Rapid Evolution"

Just Eat Takeaway.com, in partnership with PA Consulting, has just released a new report, "The Rapid Evolution: The transformative future of on-demand grocery delivery and beyond," a survey of 4,000 people from the European Union and the United Kingdom, to examine this growing trend and see how on-demand has moved from food services to the retail arena.

"It was not a surprise to see a welcome shift towards groceries from the large base of restaurants and takeaway products we have on the platform," said Andrew Kenny, commercial director of Just Eat Takeaway.com, to ESM.

"Consumers seem to be aware of how this proposition has the potential to truly change their lives."

Types of Buyers

The report distinguishes between two types of buyers in the on-demand demographic: Speed Seekers and Pacey Prospects.

Speed Seekers are early adopters in the world of on-demand deliveries and have ordered groceries for on-demand delivery at least once in the past six months. On the other hand, Pacey Prospects are people who are open to on-demand delivery but have not yet tried it.

Interestingly, the report states that the on-demand revolution could help rather than hinder everyday retailers.

For example, 76% of Speed Seekers said on-demand groceries are an addition to their regular shopping routine, not a substitute for it, while 66% said they would buy more groceries now with on-demand delivery as an option.

Emerging Markets

The report indicates that emerging countries, such as China, India, and Brazil, are ahead of the curve in terms of comfort, with on-demand grocery delivery becoming a fixture in urban nodes.

"If we look around the world and certainly in the markets we operate in, the most advanced are markets like North America – the US and Canada – the UK and Australia," Kenny explained.

"These networks have truly advanced very, very quickly in the on-demand food space and are moving into new verticals, whether it's pharmacy or pet care or consumer goods, but this is, in many ways, outpaced by what some of the players are seeing in these very large populations in markets like India, China, and Brazil.

The cost of labor and the cost to serve those customers is obviously significantly lower in those markets, which can increase or accelerate the ability to serve more customers quickly, at the right prices."

Social Impact

The report also suggests that the prevalence of on-demand shopping could have broader benefits for society in general.

For example, people who are housebound due to disability or illness will have more options and more choices during shopping, while food waste, a major problem for supermarkets, could also be reduced as consumers buy products as and when they need them, not to mention the impact on work-life balance.

"The report makes it very clear that people live extremely busy lifestyles, juggling a lot of different priorities, from work to family life and everything that comes with it," Kenny said.

"There is a sense that these on-demand grocery delivery services, but increasingly in other retail channels, give people precious time back, allowing them to be more selective about how they spend their day." (Photo: Freepik)