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Hitwise Intelligence - Robin Goad - UK

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Supermarkets continue to grow online

October 17, 2008

While looking at the fastest growing retail sectors for this month’s retail webinar, we noticed that our Grocery and Alcohol has been doing well this year. As the chart below illustrates, its share of Internet visits has been increasing gradually since January, following a decline during 2007.

UK Internet traffic to food and drink websites.png

Of course supermarket websites dominate the Grocery and Alcohol category, but Supermarkets are now about much more than just food. Last year we highlighted the growing importance of supermarket-operated websites in the run up to Christmas. Looking at our custom category of supermarket websites – which includes the likes of Tesco Direct, George (Asda) and Sainsbury’s Kitchen Appliances in addition to the grocery sections – we can see that traffic was up 10% year-on-year during September.

Uk Internet traffic to supermarket websites tesco asda aldi morissons sainsburys waitrose ocado lidl netto.png

Given the huge range of goods that supermarkets are selling online, we though that it would be interesting to see which ones are most popular. The easiest way to achieve this is to look at the search terms ending traffic to our custom category. These are illustrated in the table below - although note that we’ve filtered out all of the branded terms, which dominate the top 100, so that we’re left with generic / product terms.

Generic supermarket search terms laptops washing mahcines fridge freezers beds lcd tv.png

The first thing that you notice is the absence of food related terms, and this is because people don’t search for these very much – they are more likely to search for their favourite grocer instead. Almost all of the top terms are big tickets consumer electronics terms – ‘laptops’, ‘washing machines’, ‘fridge freezers’ – plus a few exceptions, such as ‘music downloads’ and ‘recipes’. The appearance of ‘bed’ and ‘bedroom furniture’ show that supermarkets are also tanking advantage of the booming house and garden retail market.

The other main insight is that the supermarket sites are paying for almost all of this search traffic, with paid clicks accounting for 80-90% of traffic from most terms. These top 20 terms also err towards the generic, implying that supermarkets are using their market power and search marketing budgets to pick up traffic, rather than optimize for higher converting tail terms.

To listen to a recording of this month’s retail webinar - which also includes analysis of online department stores, musical instrument and sheet music, and the impact of social networking on UK eTailers – please click here.

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