Adoption of the intersecting point of the physical and virtual world and leveraging technology to satisfy customers is a success mantra in retailers and manufacturers. Online grocery shopping trend is driven in different parts on the basis of maturation of the digital native: Millennial and Generation Z.
Online grocery shopping in the U.S. will be more than double from $14.2 billion in 2017 to $29.7 billion in 2021, led by online retail giants Amazon and Walmart. Although purchases are growing at a rapid pace, consumer usage is still relatively low.
77% of American adults have not used curbside grocery pickup and 81% haven’t ordered from a grocery delivery service. Today’s consumer has tremendous convenience at their fingertips. No more long trips to the supermarket, wandering the aisles searching for obscure items and price checking to get the best deal.
Amazon is leading the Online Grocery Market. Amazon’s (AMZN) share of the online grocery market stands at 18%. With an estimated USD 2 billion in food and beverage sales, Amazon stands head and shoulders above its closest competitor, Walmart, with roughly half of Amazon’s market share. Amazon’s most popular grocery category is beverages, followed by No. 2 coffee, No. 3 snack foods, No. 4 breakfast foods, and No. 5 candy. For Amazon’s loyal shoppers, its Prime Members, estimated to number 80-90 million, it offers Prime Pantry, a place to order everyday household basics, packaged foods, and grocery items. Prime Pantry also features weekly deals and coupons just like the local grocery store.
While consumers have been slower to adopt online shopping in grocery due to entrenched shopping habits for this most frequently purchased category and preference to personally examine and pick fresh meat and produce, online purveyors have helped consumers learn to like online grocery shopping and delivery by leading with packaged foods.
How could Global Online Grocery Market address COVID-19 concern?
Governments across the world are issuing advisories and taking strict preventive measures to ensure people do not come out of their houses and the chain of coronavirus spread is broken. The majority of people are preferring to stay indoors, however, shopping for essentials may be the single most urgent task (other than healthcare) which will force people to do the misadventure of leaving their homes and enhance the risk of possible contacts with the infected.
A pandemic forcing everyone to stay home should be the perfect moment for online grocery services. Companies that invested in digital transformation in the past few years are now seeing the fruits of those efforts as commerce goes even more digital than it has over the past few years.
Online purchasing power is increasing while offline is decreasing, fitness product sales are up 55%, toilet paper sales are up 231%, laptops and other computer sales are up 40%. BOPIS (buy online and pick up in-store) orders are up 62%. Overall, e-commerce in the U.S. is up 25%. Hand sanitizer sales, along with gloves, masks, and anti-bacterial sprays (which don’t protect against viral infections like Coronavirus) are up 807% from January 1 to March 11. Over-the-counter drug purchases are up 217%, canned goods are up 87%, and home fitness products are up 55%, all thanks to close down during the COVID-19 pandemic.
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