Online Grocery Shopping Is Growing, But Are Retailers Ready?

Nevin Barich

LOS ANGELES , April 3, 2018 (Off The Menu) – Earlier this month, my mother did online grocery shopping for the first time.

Now this was no minor thing. For years, my mom—a Baby Boomer—simply did not understand the concept of ordering groceries over the Internet. She couldn’t fathom getting food and beverages without stepping into a physical store. She had questions like, “What if they pick the wrong things?” “What if I ask for something that they’re out of?” “What if the frozen food melts while they’re driving it to me?”

But eventually, I got her to try online grocery shopping. The results were great. She got everything she wanted, the additional cost was minimal, and now that she’s been exposed to the convenience, she’s seriously considering get her food online all the time.

Yes, my mom has been converted into an online grocery shopper. And others will follow. By 2022, 70% of U.S. consumers could be doing a portion of their food shopping online. But there’s one problem: Many food manufacturers and retailers say they aren't prepared to meet this surge in demand.

This is all according to the "Digitally Engaged Food Shopper" analysis presented by a partnership between the Food Marketing Institute and Nielsen. The research looks at how food and beverage manufacturers as well as brick-and-mortar retailers can respond to the ever-growing digital grocery landscape.

"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," said Chris Morley, U.S. President of Fast Moving Consumer Goods and Retail at Nielsen. "While analytics will continue to be critical for retailers and manufacturers to understand the digitally engaged food shopper on a deeper level, a collaborative approach to balancing physical and digital sales strategies is the key to unlocking omnichannel success."

The report stated that while Amazon is leading the online grocery charge with its recent purchase of Whole Foods, other major players are actively involved. Walmart is enhancing its grocery-delivery service to reach even more cities and Target has acquired an online same-day delivery platform. For smaller grocery chains, it’s a bigger challenge, according to the report. They simply don't have the resources to offer the convenience that today's consumers want. But they don't have to worry quite yet: 97% of groceries are still purchased in stores and many shoppers want to pick out their produce themselves.

But still: Online grocery shopping is growing and will only continue to grow. Food retailers better be ready for the surge.

Nevin Barich is the Food and Beverage Analyst for Industry Intelligence, which can help YOU better address your own industry challenges. We invite you to come take a look at our service. Call us today at 310-553-0008 and we’ll schedule you for a 15-minute demo.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.