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

Published: November 2, 2017 - 106 Pages

Executive Summary
- Market & Forecast for Online Sales of Groceries
  - Table 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
  - The Three Elements Online Grocers Must Get Right
  - Pickup over Delivery
  - Create Online Marketplaces and Collaborate with Local Producers
  - Convince Existing Customers to Shop Online More
  - Amazon/Whole Foods Synergy
  - Avoid Trying to Out-Amazon Amazon
  - Leverage Existing Infrastructure for Pickup
  - Personalization and Recommendations
  - High-Income Adults
  - Highlight the Fun of Grocery Shopping
  - Focus on Suburbanites
Trends & Opportunities
- Chapter Highlights
  - Scope
  - Methodology
  - Disrupter: The Three Elements Online Grocers Must Get Right
- Other Key Trends
  - Disruptor: Will Pickup Beat Delivery to Solve the Last-Mile Dilemma?
  - Opportunity: Create Online Marketplaces and Collaborate with Local Producers
  - Millennials Are Important, but Do Not Forget Gen X
  - Voice Ordering for the Future
- Forecast
The Market
- Chapter Highlights
- The Market for Online Sales of Groceries
  - Table 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 U.S. All Food and Beverage Sales and Online Grocery Sales, 2010–2017E (dollars in billions and percent)
  - U.S. Online Grocery Growth Excellent, but Overshadowed by China
- Market Share by Retailer Category
  - Table U.S. Online Grocery Market by Retailer Category, 2017E (dollars in millions and percent)
- Center Store Goods Lead Online Grocery Product Sales
  - Table U.S. Online Grocery Market by Product Category, 2017E (dollars in millions and percent)
- Opportunity: Convince Existing Customers to Shop Online More
- Market Share by Type of Grocery Delivery
The Marketers
- Chapter Highlights
- Mergers & Acquisitions
  - Table Online Grocery Mergers & Acquisitions, 2015–2017
  - Venture Capital Only Available to the Lucky Few
    - Table Investment in Online Grocery Companies, 2014–2017 (dollars in millions)
  - Opportunity: Amazon Creates Synergy with Whole Foods Acquisition
- The Major Players
  - The Amazon Online Grocery Hydra: A Many-Headed Approach
    - Table Amazon's Online Grocery Services
  - Opportunity: Avoid Trying to Out-Amazon Amazon
- Online-Only Grocery Providers
  - Table Selected Online-Only Grocery Companies
- Third-Party Pack-and-Deliver Services
  - Table Selected Grocery Packing and Delivery Companies
- Traditional Grocers in the Online Grocery Space
  - Table Selected Brick & Mortar Retailers Offering Online Grocery Sales
  - Opportunity: Walmart & Kroger Leverage Existing Infrastructure for Pickup
  - The Partnership Landscape
Apps & Online Portals
- Chapter Highlights
- Website, App, and Interface Likes and Dislikes
- User Interface Consumer Satisfaction and Trends
  - Opportunity: Personalization and Recommendations
  - Convenience and Saving Previous Orders
  - Voice Ordering a Future Possibility
  - High Quality Product Images Necessary to Build Consumer Trust
- How Are People Ordering Online?
  - Majority of Shoppers Order Groceries Online Once a Month or Less
  - Renewal and Subscription Services
- Creating the Perfect Virtual Store
  - Third-Party Platforms Make Offering Online Groceries Possible for Independents
    - Table Online Grocery Platform Providers
  - Opportunity: Integrate Digital Coupons with App and Website
Packing and Delivery Trends
- Chapter Highlights
- Packing & Delivery Likes & Dislikes
- Multi-Day Home Delivery Most Used by Online Grocery Shoppers
  - The Grocery Delivery Conundrum: Fast but Free
- Delivery and Pickup Costs and Trends
  - Sharing Delivery to Cut Costs
  - 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
Consumer Trends
- Chapter Highlights
- Online Grocery Growing Faster Than Overall Online Shopping
  - Table 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 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
- Consumers Shop Online to Save Time
  - Opportunity: Highlight the Fun of Grocery Shopping
- Snacks the Most Popular Type of Grocery Purchased Online
- Geographic Trends
  - Table Online Shopping by County Size and Metro Market Area, 2017 (in thousands of adults and percent)
  - Opportunity: Half of Online Grocery Shoppers are Suburbanites

Abstract

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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 online grocery 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

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

U.S. Online Grocery Market Share by Retailer Category and Grocery Delivery Type

Traditional grocers' market share within online grocery shopping has been declining since 2004 according to U.S. census data, however this trend has seen a gradual reversal in the past two years. Big-name grocery retail competitors such as Walmart and Kroger have added close to one thousand pickup points for online grocery orders in 2016 and 2017. Meanwhile, traditional grocery retailers and mass merchandisers hold a majority of the online grocery shopping market's sales numbers in 2017. These traditional retailers gather a significant number of online grocery sales through brick-and-mortar grocery stories, projected at approximately three-quarters' worth. Grocery orders for delivery from online-only grocers account for a large minority of the 2017 market share and makes them the single largest category for delivery type in this market. Delivery from traditional grocery providers whose locations are largely, if not completely, brick-and-mortar account for the market's second largest category, followed b online grocery orders that make use of in-store or curbside pickup.

What You’ll Get in Online Grocery Shopping in the U.S.

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 online grocery 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.

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