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.
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.