New ‘quick commerce’ channel worth £1.4bn, IGD estimates

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The newly emerging ‘quick commerce’ channel – which delivers food and groceries to consumers in less than one hour and often sub-30 minutes – is currently worth £1.4bn according to a new report from IGD, the insight and analysis providers for the food and consumer goods industry.

The report, which is part one of a series that looks at the size, scope and growth of the new channel, also reveals that the estimated size of the opportunity will grow to  £3.3bn in the UK alone.

Simon Mayhew, head of online retail insight at IGD, explains: “Rapid delivery, or ‘quick commerce’ as it is now known, has been around for some time, but COVID-19 has clearly catapulted its expansion to the point where it’s become a channel in its own right. Its growth is evident in the UK, but also on a worldwide scale, with players like Fancy, Getir, Weezy, Gorillas and Jiffy fast becoming household names.”

The report reveals that one in three shoppers in the UK have used, or are interested in using quick commerce and the most common drivers for purchase are food-to-go, top-up shopping and ‘meal for tonight’. The average age of the quick commerce shopper is 36 and its main shopper group is young adults living in urban locations.  More than seven out of ten shoppers who use, or are interested in using quick commerce can be inspired to use it to pick-up last-minute items for key events such as Summer barbecues, key sporting events, parties and public holidays.

To provide clarity on this new landscape and to help retailers and suppliers understand its operating models, IGD has also identified three sub-sectors within the channel:

Aggregators – Third-party websites offering on-demand fulfilment. There are three types, which include takeaway aggregators (e.g. Deliveroo), grocery-focused aggregators (Instacart) and service aggregators (Glovo), which offer a range of other services in addition to grocery.

Pure plays – These emerging operators are building their proposition around a high-speed delivery service, often with delivery in under 15 minutes. They run their own fulfilment centres, or dark stores, in urban high population areas for quick delivery. Players include Jiffy, Dija, Getir, Gorillas, and Fridge No More.

Retailers – As well as partnering with third-party players for delivery services, established retailers have also launched their own on-demand services. These include Sainsbury’s Chop Chop and Ocado Zoom. Fulfilment is varied, with some retailers using in-store pick and some retailers using automation.

Rachel Sibson, retail analyst at IGD and author of “Quick Commerce: get up to speed”, explains: “Quick commerce is an exciting, fast-paced channel which presents a huge opportunity for suppliers, retailers, aggregators and pure plays. The new report maps out development and growth on a global scale and also looks closely at the UK, using our ShopperVista data. The second and third editions of the report series will focus on retailer best practice, how to gain share and the future outlook.”