The food and beverage category is the largest retail category in the United States at $600 billion per year, Business Insider reports[1] and technology has transformed the way consumers purchase things in many industries. iTunes allows consumers to gather music and purchase music from wherever they are, Amazon gives shoppers the ability to view, select and purchase from an extensive selection of products based on recommendations, product reviews, etc. Streaming services like Hulu and Netflix enable users to access shows and movies wherever and whenever they want. Consumers are more and more accustomed to the perks of digital in many retail settings and the grocery industry is the next industry that digital and ecommerce are going to take by storm!
29% increase in total online grocery purchases in the past year
19% doing all weekly food shopping online[2]
Imagine a grocery store where you can get personalized messages and recommendations based on purchase history, offers when you walk into the store, checkout is quick and you do not have to take out your wallet to pay for your groceries. This scenario is a lot closer than we may think! ¼ of consumers are now ordering and purchasing their groceries online and according to a recent Nielsen report, 55% are willing to do so as well in the near future.
“Groceries present an attractive category due to the frequency of purchase — it is a way to ensure audience and website visitation for the ‘digital native’ companies,” said Josh Goldman, global leader of digital shopping at Nielsen.
A lot of traditional grocers, especially European grocers like Tesco, see the potential that lies in online grocery shopping. We can also see tech giants like Google and Amazon coming in to grab a share of this online market as well. Amazon has recently launched Prime Now that enables their customers to get non-perishable items and Amazon Fresh that delivers fresh local items and grocery products within 24 hours. Even with the huge potential and audience for online grocery shopping growth, companies will still have challenges ahead of them, i.e. handling frozen breakable and fresh items during the delivery process. And brick and mortar stores will not be going anywhere either as there are many items that consumers want to purchase immediately or items like medicine, etc. Nielsen conducted a survey where 61% of respondents reported enjoying the actual visitation to a grocery store and 57% viewed a grocery store visit as a fun outing for the family.
As new generations are growing up and being born into a digital-first world, they expect everything and anything to be at their fingertips online, so it only makes sense that the grocery industry will continue to grow online as well. Nielsen conducted another survey where 30% of millennials and 28% of Gen Z respondents reported they order groceries via the internet vs 22% of Gen X and 17% of baby boomers.
Door to Door Organics created a great infographic showing the growth of ecommerce in the grocery industry:
National Survey Shows Increase In Online Grocery Shopping Habits. (PRNewsFoto/Door to Door Organics)
[1] Source: http://www.businessinsider.com/e-commerce-disrupting-huge-grocery-market-2014-12#ixzz3f7xsYhz3
[2] Source: http://www.retailcustomerexperience.com/news/online-grocery-shopping-gaining-in-popularity-among-consumers/?utm_source=NetWorld%20Alliance&utm_medium=email&utm_campaign=EMNARCE07062015
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