Consumers are taking to the digital age and even making daily purchases like groceries online. A 2019 U.S. Grocery Survey indicated that the number of online grocery shoppers is growing substantially — even if they are only shopping online occasionally.
According to Coresight Research’s report, about 36.8 percent of U.S. consumers made a purchase online for groceries in the past year — up from about 23.1 percent in 2018’s survey. “We estimate that equates to almost 35 million more consumers buying groceries online between 2018 and 2019,” the report suggests.
However, though more people are shopping online, it doesn’t suggest they are making bigger purchases. The report indicates that shoppers tend to buy “relatively little online.” About 72.4 percent of those who purchase groceries online buy a small amount of groceries while 11.8 percent purchase large amounts of groceries online, the report states. “Our data suggest new online shoppers could be diluting the proportion of grocery shopping the average shopper does online,” the report states.
Additionally, many of those who bought groceries online, about 62.5 percent, used Amazon.com to buy their groceries.
Other stores besides Amazon have caught onto the online grocery trend, seeing the benefits of expanding their reach into the billion-dollar grocery market. According to the U.S. Bereau of Labor Statistics, the average American household spends more than 10 percent of their total budget on food. The average annual food cost for a U.S. household in 2013 was $6,602, breaking down to about $2,641 per person.
Forbes predicts that the online grocery trend won’t go away anytime soon, stating the American grocery market is three times bigger than all online retail markets. According to Forbes, “an Amazon store will be within 20 miles of 70 percent of the population,” giving them an arms-length reach into most American’s food budgets.
Forbes states that more than one-fifth of the population’s groceries in America are purchased at Walmart. Stepping into the online retailer world, Walmart’s nearby locations and 5,300 stores nationwide will make it easier for them to push online grocery and delivery services.
Walmart plans on extending its delivery services to one-day in Phoenix, Las Vegas and Southern California.
“Additionally, Walmart is on track to offer Grocery Pickup from 3,100 stores and same-day Grocery delivery from 1,600 stores by the end of 2019, which will provide coverage to approximately 80 percent and 50 percent of the U.S. population,” The Food Institute reported. Retailers will now be battling over the next biggest online trend to try to get consumers to shop online. This may spell trouble for traditional grocery chains nationwide who have yet to catch on to digital revenue models.
If anything, Amazon will likely be in competition with Walmart for the top spot in the online grocery shopping market. With Americans spending roughly $550 per month on groceries, this could potentially be a cash influx as consumers with families may opt for delivery to forgo the traditional store experience.
The convenience element, one-day delivery offers and ease of online purchasing may revolutionize the mostly-unchanged grocery industry.
Source: Coresight Research