– Do you work in the Financial Services industry? [Get business insights on the latest tech innovations, market trends, and your competitors with data-driven research.] – The following is a preview of one Financial Services report, the Online Grocery report.[You can purchase this report here.] The coronavirus pandemic has brought online grocery—a promising but formerly niche industry—to the fore.The combination of shoppers’ interest in avoiding public places, government orders to stay at home, and the continued need for groceries and essential goods has made online grocery delivery services from retailers like of Walmart, Amazon, Target, and Instacart indispensable.US Grocery Industry E-commerce made up just 2% of total food and beverage sales in 2019, per eMarketer, but many US consumers have turned to online grocery shopping services for the first time during the pandemic.The coronavirus pandemic is pushing consumers to buy essential products digitally, rapidly accelerating the development of online grocery, curbside pickup, and same-day delivery in the US.
Previously, some consumers resisted the shopping method because they wanted to pick out their groceries themselves and avoid extra fees, but the pandemic has forced many to change their priorities.And the sudden focus on grocery delivery is set to alter consumer behavior well after the pandemic subsides, accelerating the industry’s penetration in the US.Online Grocery Shopping Market Size & Stats Prior to the COVID-19 pandemic, online grocery sales were growing and the segment was becoming an increasingly important part of grocery’s future, but it still made up a tiny piece of market share.
US food and beverage retail e-commerce sales were expected to total almost $24 billion in 2020 and surpass $38 billion in 2023, giving the industry a compound annual growth rate (CAGR) of 17.3% during this span, per an eMarketer forecast from 2019.But this would only account for a 2.3% share of total US food and beverage sales in 2020 and 3.5% in 2023.
So, even though online grocery sales were on the rise, they only represented a tiny part of the grocery industry—and considering its sales growth was expected to peak in 2020, it wasn’t set to take the market by storm, as it is now.Insider Intelligence projects that as the pandemic runs its course in the next few months, online grocery adoption will reach 55% of US consumers by the end of 2024.This would still be much greater penetration than the online grocery market would’ve reached without a pandemic.But if the pandemic stretches longer as we await a broader vaccine rollout or other treatments, it will climb quickly, hitting 66% in 2024 instead.eCommerce Grocery Shopping Trends The coronavirus pandemic is pushing consumers to buy essential products digitally, which is rapidly accelerating adoption of online grocery services in the US.And while the pandemic gave online grocery adoption a big push, the industry’s staying power will come down to the length of the pandemic.
If the crisis stretches on, more consumers may be pushed to try an online grocery service—and how well online grocers meet surging demand will become critically important.The online grocery services that are best able to handle surging order volume will likely be the most popular services after the pandemic subsides because consumers will be able to rely on those services to consistently bring them groceries.Alternatively, if they find it difficult to receive orders, consumers may abandon online grocery altogether.As of right now, Walmart and Instacart are best positioned to lead the pack post-pandemic given Walmart’s massive brick-and-mortar network and Instacart’s wide reach thanks to its platform model.
Top Online Grocery Shopping Companies The Online Grocery Report from Insider Intelligence examines how the pandemic has rapidly accelerated widespread online grocery adoption.The companies mentioned in this report are: Albertsons, Aldi, Amazon, BJ’s Wholesale Club, Costco, FreshDirect, Grubhub, Hannaford, H-E-B, Instacart, Kroger, Ocado, Peapod, Publix, Target, Uber Eats , Walgreens, Walmart, and Whole Foods.How well online grocers meet demand during the pandemic will play a major role in determining the top online grocers after the pandemic abates.Grocers’ ability to fulfill as many orders as possible in a variety of convenient channels throughout the pandemic will be important, as consumers may turn to different providers if they can’t place an order from one grocer through the channel they want—an issue that’s popped up in some markets for several grocers during the crisis.But online grocers that can keep customers throughout the pandemic may be able to keep those shoppers for the foreseeable future: 75% of online grocery shoppers still shopped with their first-ever online provider, per a survey from Bain and Google from 2018.
So, the grocers that meet the most consumers’ needs during the pandemic will likely lead the industry even after it subsides.The Online Grocery Report first looks back at how online grocery adoption was progressing prior to the coronavirus pandemic to understand the state of the industry before the shopping method became vital to many consumers.Next, we examine why the pandemic is popularizing online grocery services and the impact it’s already having on adoption.We then forecast how online grocery’s penetration will grow in the coming quarters and years due to the pandemic, and consider the factors that will determine the industry’s staying power.Finally, we analyze top online grocery players’ ability to meet surging demand during the pandemic and how that positions them to build customer bases that can last well beyond the pandemic.
In full, the report: – Examines the US online grocery industry prior to the coronavirus pandemic to highlight what was driving the industry’s adoption, and what obstacles it faced.- Analyzes why the realities of the pandemic — such as concerns about contracting the virus — have pushed many consumers to try an online grocery service for the first time.
– Forecasts the US online grocery industry’s penetration in 2020 and in the years to come, laying out a moderate and extreme scenario to account for the uncertainty surrounding the recovery from the pandemic.- Discusses why the duration of the pandemic and online grocers’ ability to meet demand will determine the popularity of online grocery after the pandemic subsides.- Highlights how Walmart, Amazon, Target, and Instacart are positioned in the online grocery industry, how well they’re meeting demand during the pandemic, and how they are expected to fare in the space beyond the pandemic.- Recommends how online grocers can maximize their performances during and after the pandemic with innovations like automation, operational flexibility, and bundling services.
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