Online Grocery Shopping in the U.S.: Food Industry Disruptor Series

Nov 2, 2017
106 Pages - Pub ID: LA15417197
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Online Grocery Shopping in the U.S.

Improving trust in perishable selection and expanding service reach are key to developing market share in online grocery sales over the next five years. The two giants driving online grocery sales best exemplify the competition between pickup and delivery models: Amazon is using its extensive Amazon Prime membership to encourage its customers join its delivery bandwagon, while Walmart is working to establish pickup grocery service at almost half of its stores by the end of 2018. Even so, both these retailing giants need to improve consumer trust in perishable selection and delivery to match the trust levels garnered by long-time online grocery incumbents Fresh Direct and Peapod.

Online Grocery Sales Growth to Continue Despite Urban Market Niche

The additional costs that typically go along with online grocery orders, coupled with service area limitation, means that online grocery sales remain anchored in highly urbanized areas, and personal income levels remain the most important demographic indicator for online grocery sales.  This will not slow market expansion, however.  On the cusp of incredible growth, online grocery sales will more than triple by 2022, reaching $41.7 billion and seeing a compound annual growth rate of 27.1%.

What You’ll Get in This Report 

Online Grocery Shopping in the U.S. provides an in-depth analysis of the online sale of foods and beverages in the U.S., focusing on the key product categories and delivery styles driving the market. The report covers the online sale of groceries from traditional supermarkets and mass merchandisers now selling products online, online-only grocers and marketplaces selling perishable and non-perishable foods and beverages, and third-party pack and deliver companies. All information and analyses in the report is highly accessible, presented in concise text and easy-to-read and practical charts, tables, and graphs. 

Report Methodology 

The information in Online Grocery Shopping in the U.S. was obtained from primary datasets including U.S. Census Bureau data, consumer survey data compiled by Packaged Facts’ own National Consumer Survey, and Simmons Research Profile Reports. Other primary research includes interviews with grocery experts, on-site examination of retail and service provider venues, and internet canvassing including websites and blogs. Secondary research includes information- and data-gathering from consumer business and trade publications, company profiles, and Packaged Facts’ own extensive food and beverage research database and report collection.

CHAPTER 1: EXECUTIVE SUMMARY
MARKET & FORECAST FOR ONLINE SALES OF GROCERIES
Table 1-1 U.S. Sales of Online Groceries, 2013–2022 (dollars in billions and percent)
Market Share by Retailer Category and Type of Grocery Delivery
Nonperishables Lead Online Grocery Product Sales
THE MARKETERS
Online-Only Grocery Providers
Third-Party Shopping and Delivery Services
Traditional Grocers in the Online Grocery Space
APPS & ONLINE PORTALS
How Are People Ordering Online?
Majority of Shoppers Order Groceries Online Once a Month or Less
PACKING AND DELIVERY TRENDS
Is Free Pickup/Delivery a Sustainable Business Model?
Crowdsourced Delivery
CONSUMER TRENDS
Amazon and Walmart Most Popular Online Grocery Retailers
Consumers Shop Online to Save Time
Snacks the Most Popular Type of Grocery Purchased Online
Disruptor 1 – The Three Elements Online Grocers Must Get Right
Disruptor 2 – Pickup over Delivery
Opportunity 1 – Create Online Marketplaces and Collaborate with Local Producers
Opportunity 2 – Convince Existing Customers to Shop Online More
Opportunity 3 – Amazon/Whole Foods Synergy
Opportunity 4 – Avoid Trying to Out-Amazon Amazon
Opportunity 5 – Leverage Existing Infrastructure for Pickup
Opportunity 6 – Personalization and Recommendations
Opportunity 7 – High-Income Adults
Opportunity 8 – Highlight the Fun of Grocery Shopping
Opportunity 9 – Focus on Suburbanites
CHAPTER 2: TRENDS & OPPORTUNITIES
CHAPTER HIGHLIGHTS
Scope
Methodology
Disrupter: The Three Elements Online Grocers Must Get Right
Figure 2-1 Relative Trust in Perishable Picking and Service Reach of Online Grocers
OTHER KEY TRENDS
Disruptor: Will Pickup Beat Delivery to Solve the Last-Mile Dilemma?
Figure 2-2 AmazonFresh Service Availability, 2017
Opportunity: Create Online Marketplaces and Collaborate with Local Producers
Millennials Are Important, but Do Not Forget Gen X
Figure 2-3 Online Grocery Shopping Opinions of Millennials and Gen X Adults, 2017 (in percent)
Voice Ordering for the Future
FORECAST
Figure 2-4 Online Grocery Market and Forecast, 2013–2022 (dollars in billions and percent)
CHAPTER 3: THE MARKET
CHAPTER HIGHLIGHTS
THE MARKET FOR ONLINE SALES OF GROCERIES
Table 3-1 U.S. Sales of Online Groceries, 2013–2017E (dollars in millions and percent)
Online Grocery Sales a Small Percentage of Overall Grocery Sales but Growing Quickly
Table 3-2 U.S. All Food and Beverage Sales and Online Grocery Sales, 2010–2017E (dollars in billions and percent)
Figure 3-1 Percentage of Adults Who Shopped for Groceries Online in Last 3 Months, Spring 2014–Spring 2017 (in percent)
U.S. Online Grocery Growth Excellent, but Overshadowed by China
MARKET SHARE BY RETAILER CATEGORY
Figure 3-2 U.S. Online Grocery Market Sales by NAICS category, 2000–2015 (in percent)
Table 3-3 U.S. Online Grocery Market by Retailer Category, 2017E (dollars in millions and percent)
CENTER STORE GOODS LEAD ONLINE GROCERY PRODUCT SALES
Table 3-4 U.S. Online Grocery Market by Product Category, 2017E (dollars in millions and percent)
Figure 3-3 Grocery Spending Amounts by Product Category, All Groceries and Online Groceries,
2016/2017 (in percent)
OPPORTUNITY: CONVINCE EXISTING CUSTOMERS TO SHOP ONLINE MORE
Figure 3-4 Online Grocery Spending Amounts by Store Type, Delivery Type, and Ordering Platform,
2017 (in percent)
MARKET SHARE BY TYPE OF GROCERY DELIVERY
Figure 3-5 U.S. Online Grocery Market Share by Delivery Style, 2017E (in percent)
CHAPTER 4: THE MARKETERS
CHAPTER HIGHLIGHTS
MERGERS & ACQUISITIONS
Table 4-1 Online Grocery Mergers & Acquisitions, 2015–2017
Venture Capital Only Available to the Lucky Few
Table 4-2 Investment in Online Grocery Companies, 2014–2017 (dollars in millions)
Opportunity: Amazon Creates Synergy with Whole Foods Acquisition
THE MAJOR PLAYERS
Figure 4-1 Top Five Online Grocery Retailers by Market Share, 2017 (in percent)
The Amazon Online Grocery Hydra: A Many-Headed Approach
Table 4-3 Amazon’s Online Grocery Services
Opportunity: Avoid Trying to Out-Amazon Amazon
ONLINE-ONLY GROCERY PROVIDERS
Table 4-4 Selected Online-Only Grocery Companies
THIRD-PARTY PACK-AND-DELIVER SERVICES
Table 4-5 Selected Grocery Packing and Delivery Companies
TRADITIONAL GROCERS IN THE ONLINE GROCERY SPACE
Table 4-6 Selected Brick & Mortar Retailers Offering Online Grocery Sales
Opportunity: Walmart & Kroger Leverage Existing Infrastructure for Pickup
The Partnership Landscape
Figure 4-2 Partnerships in the Online Grocery Space
CHAPTER 5: APPS & ONLINE PORTALS
CHAPTER HIGHLIGHTS
WEBSITE, APP, AND INTERFACE LIKES AND DISLIKES
Figure 5-1 Likes and Dislikes for Online Grocery Applications and Online Portals, 2017 (in percent)
USER INTERFACE CONSUMER SATISFACTION AND TRENDS
Opportunity: Personalization and Recommendations
Figure 5-2 Online Grocery Shoppers Opinions on Ordering Personalization, 2017 (in percent)
Convenience and Saving Previous Orders
Figure 5-3 Online Grocery Shopper Opinions on Convenience of Online Interface, 2017 (in percent)
Voice Ordering a Future Possibility
High Quality Product Images Necessary to Build Consumer Trust
HOW ARE PEOPLE ORDERING ONLINE?
Figure 5-4 Website versus Smartphone for Ordering Groceries Online, 2017 (in percent)
Figure 5-5 Device Used to Order Online Groceries, 2017 (in percent)
Majority of Shoppers Order Groceries Online Once a Month or Less
Figure 5-6 Frequency of Online Grocery Ordering, 2017 (in percent)
Renewal and Subscription Services
Figure 5-7 Use of Subscription Services for Online Grocery Ordering, 2017 (in percent)
CREATING THE PERFECT VIRTUAL STORE
Third-Party Platforms Make Offering Online Groceries Possible for Independents
Table 5-1 Online Grocery Platform Providers
Opportunity: Integrate Digital Coupons with App and Website
CHAPTER 6: PACKING AND DELIVERY TRENDS
CHAPTER HIGHLIGHTS
PACKING & DELIVERY LIKES & DISLIKES
Figure 6-1 Packing and Delivery Likes and Dislikes for Online Grocery Shopping, 2017 (in percent)
MULTI-DAY HOME DELIVERY MOST USED BY ONLINE GROCERY SHOPPERS
Figure 6-2 Types of Delivery Service Used for Online Groceries, 2017 (in percent)
The Grocery Delivery Conundrum: Fast but Free
DELIVERY AND PICKUP COSTS AND TRENDS
Sharing Delivery to Cut Costs
Figure 6-3 Willingness to Share Grocery Delivery with Neighbors, 2017 (in percent)
Is Free Delivery a Sustainable Option for Businesses?
Forget Last-Mile; Amazon and Walmart Want to Deliver to Inside Your Home
CROWDSOURCED DELIVERY
Walmart Trials Using Regular Employees as Delivery Drivers
CHAPTER 7: CONSUMER TRENDS
CHAPTER HIGHLIGHTS
ONLINE GROCERY GROWING FASTER THAN OVERALL ONLINE SHOPPING
Table 7-1 Online Shopping Trends, 2013–2017 (in thousands of adults and percent)
A Note on Survey Sources
OPPORTUNITY: INCOME THE MOST IMPORTANT ONLINE GROCERY DEMOGRAPHIC INDICATOR
Table 7-2 Key Demographic Measures for Online Grocery Shoppers, 2017 (in thousands of adults,percent of population, and index) Gender, Race, and Location also Important Indicators
AMAZON AND WALMART MOST POPULAR ONLINE GROCERY RETAILERS
Figure 7-1 Online Grocery Marketers Used for Grocery Purchases in Last 30 days, 2017 (in percent)
CONSUMERS SHOP ONLINE TO SAVE TIME
Figure 7-2 Especially Important Reasons for Choosing to Order Groceries Online, 2017 (in percent)
Opportunity: Highlight the Fun of Grocery Shopping
Figure 7-3 Grocery Shopping Opinions of All Grocery Shoppers and Online Grocery Shoppers, 2017 (inpercent)
SNACKS THE MOST POPULAR TYPE OF GROCERY PURCHASED ONLINE
Figure 7-4 Types of Groceries Purchased in Last 30 days, 2017 (in percent)
GEOGRAPHIC TRENDS
Table 7-3 Online Shopping by County Size and Metro Market Area, 2017 (in thousands of adults and
percent)
Figure 7-5 Percentage of Adults Online Shopping and Online Grocery Shopping by County Type, 2017(in percent)
Opportunity: Half of Online Grocery Shoppers are Suburbanites
Figure 7-6 Online Grocery Shopping by Population Type, 2017 (in percent)

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