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Tomatoes Offline, Wine Online

E-commerce in the area of the grocery retail trade is still in its infancy in Switzerland. One reason for this is that people prefer to buy fresh products in stores.

The majority of the Swiss population prefers to buy tomatoes or oranges in the store rather than online. This can be seen from the share of current revenue of Swiss food retailers that is accounted for by online trade. In 2014, according to calculations by the Credit Suisse Industry Research team, grocery retailers earned around 1.6 percent of their food revenue online. That is less than 1 billion Swiss francs.

For consumers, fruits and vegetables play an important role here. Some prefer green bananas whereas others like them ripe. Some people don't care what their carrots look like, while others want them to be flawless. Because it is not possible to select fresh products yourself when buying online, personal preferences such as these cannot be taken into account. This is why people still prefer buying them offline.

Quality Matters

Quality control of fresh products becomes especially important when planning special occasions, such as cooking for friends. At such times, grocery shopping becomes a sensory experience. You want to get advice from the butcher, look for the best tomatoes in the store and only buy bread that is still warm and smells delicious. Of course there can be no question of shopping online in this case.

Uncooked staples with long shelf lives such as pasta and rice, or beverages, are a different matter. There is a good reason why the major Swiss online retailers limit the order quantity for beverage crates to eight.

However, such staples make up only a quarter of the Swiss household food budget and are usually purchased along with fresh products. In addition, it is not usually all that far to the nearest grocery store. That's why there is still little potential for e-commerce in the area of grocery retail in Switzerland – at least for now.

People Have Less and Less Time

In the future, however, the Swiss population is likely to focus more on online grocery shopping. Credit Suisse Industry Research forecasts that the share of revenue from e-commerce in the Swiss food retail business will increase to almost 3.5 percent by 2020. The reasons for this include the increasing rate of employment and the associated lack of time, as well as the aging of society, which are likely to increase the popularity of home delivery. Compared to electronics in the home (forecast for 2020: around 38 percent), the proportion of food purchased online will remain modest. 

Patricia Feubli is part of the Swiss Industry Research team at Credit Suisse.