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Are You Prepared? Online Grocery to Hit a 20% Market Share

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NOTE: This blog post was originally published in 2018. Relevant copy has been added in 2021 to account for mass changes to the ecommerce grocery market.

Grocery stores have seen significant digital disruption, and the pace of change is set to accelerate.

Wow, if I only knew what I wrote back in 2018 would come true so quickly! In 2020, 43% of shoppers used online grocery compared to only 24% in 2018. 

For many shoppers, since the onset of the pandemic, in-store shopping took a backseat to ecommerce. It’s never been easier to fill up your virtual shopping cart and select a designated time for pickup or delivery.

In August 2020, the average online order value hit $95, the highest monthly total ever, according to Brick Meets Click.

Predictions are rolling in that online grocery will become a $250 billion business by 2025… this is incredible, considering the pre-pandemic projection for 2025 was more than $100 billion LESS. The five-year growth forecast marks a more than 60% increase over pre-coronavirus pandemic dollar sales estimates for the online grocery space, Mercatus and Incisiv noted

McMillanDoolittle, a retail strategy and consulting firm, thinks it’s possible for online grocery to account for 21.5% of total grocery sales by 2025.

The biggest takeaway is that online food shopping has become the norm. Like Grocery Dive says, “Millions more consumers than anticipated are now shopping online, and that’s pushing retailers to innovate, creating a virtuous cycle that’s whirling toward a rapidly evolving digital future.”

The ballooning digital component will force changes to the way food is sold and transported. Transparency will become crucial as consumers demand an end-to-end look at where their food comes from, and CPG marketers will need to optimize packaging to appeal to younger buyers who prefer mobile ordering. The B2C parcel industry will be worth nearly $50 billion by 2019.

Digitally Disrupted: Online Buying BehaviorToday, food shoppers are digitally engaged.

 

  • Online grocery saw a 4.3% market share in 2017. In 2019, ecommerce made up just 2% of total food and beverage sales.

 

  • According to Digital Commerce 360, 36% of consumers surveyed plan to grocery shop online this year. And, more than half of online grocery shoppers are likely to try buying from Amazon.

 

  • In as few as 5-7 years, 70% of consumers will be grocery shopping online.

 

  • The estimated $100 billion spend is equivalent to every US household spending $850 online for food and beverages annually, and will occur by 2024.

 

“The grocery industry is currently in the age of digital experimentation, where the roadmap on how to navigate and achieve real and profitable growth continues to evolve,” says Chris Morley, US President FMCG & Retail, Nielsen.

 

2021 Digital Food Shopping Numbers & Trends:

“The events of 2020 have forever changed how Americans shop for groceries and household goods,” said Laurentia Romaniuk, Instacart’s Trends Expert and Senior Product Manager.

 

  • Online grocery adoption will reach 55% of US consumers by the end of March 2024.

 

  • Consumers cite COVID-19 concerns (62%), convenience (62%) and time savings (42%) as the top three reasons for shifting to online grocery shopping.

 

  • 66% of respondents who shop online described real-time inventory visibility as very important.

 

  • Nearly half of consumers say they prefer online grocery shopping. Post-pandemic, 90% of e-grocery customers are expected to continue shopping online

 

  • Almost a quarter (22%) of Americans say they have shifted from weekend to weekday shopping runs this year.

 

  • 78% of all shoppers surveyed said they still prefer to visit a brick-and-mortar grocery store, either to shop in-store or pick up curbside orders.

 

  • Nearly half of all Americans (47%) say they still like to cook most, if not all of their meals, from home.