Online grocery is a promising but formerly niche industry because of the coronaviruses. 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 Walmart, Amazon, Target, and Instacart indispensable.
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The US has seen a rapid increase in online grocery adoption.
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The US grocery industry is small.
E-Commerce made up 2% of total food and beverage sales in the US in the year, but many US consumers have turned to online grocery shopping services for the first time during the PAIN. The coronaviruses are pushing consumers to buy essential products digitally, rapidly speeding the development of online grocery, curbside pickup, and same-day delivery in the US
Consumers used to resist 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. The industry's penetration in the US is set to accelerate after the swine flu epidemic ends.
The online grocery shopping market has a size.
Online grocery sales were growing and becoming an important part of grocery's future, but it still made up a tiny piece of market share. The US food and beverage retail e-commerce sales were expected to reach almost $24 billion in 2020 and surpass $38 billion in 2023, giving the industry a compound annual growth rate of 17.3% during this span.
This would only account for 2.5% of total US food and beverage sales in 2020. Even though online grocery sales were on the rise, they only represented a tiny part of the grocery industry and it wasn't set to take off as it is now.
Insider Intelligence believes that online grocery adoption will reach 45% of US consumers by the end of the year. The online grocery market would've reached greater penetration without the Pandemic. If we wait longer for a vaccine or other treatments, the pandemic will rise quickly, hitting 70% in 2024.
There are grocery shopping trends.
The coronaviruses are pushing consumers to buy essential products digitally, which is rapidly increasing adoption of online grocery services in the US
The industry's staying power will depend on the length of the Pandemic. If the crisis continues, more consumers may be encouraged to try an online grocery service, and how well online grocers meet surging demand will become critically important.
Consumers will be able to rely on online grocery services to bring them groceries after the Pandemic wears off, because they are best able to handle surging order volume. Consumers may abandon online grocery if it is difficult to receive orders.
Walmart and Instacart are best positioned to lead the pack post-pandemic because of their platform model and their large brick-and-mortar network.
Online grocery shopping companies.
The Online Grocery Report from Insider Intelligence shows how the Pandemic has accelerated online grocery adoption. The companies mentioned in the report are: Walmart, Target, and H-E-B.
How well online grocers meet demand will be a big factor 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 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.
75% of online grocery shoppers still shop with their first-ever online provider, according to a survey from Bain and Google. The most consumers' needs will likely be met by the grocers that meet them.
Before the shopping method became important to many consumers, the Online Grocery Report looked back at how online grocery adoption was progressing prior to the coronaviruses. The impact of the Pandemic on adoption is examined next. We 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. We analyzed the ability of top online grocery players to meet surging demand during the Pandemic and how that positions them to build customer bases that can last well beyond the epidemic.
The report is in full.
What was driving the industry's adoption and what obstacles it faced are examined in this report.
The realities of the Pandemic have caused many consumers to try an online grocery service for the first time.
In the years to come, the US online grocery industry's penetration will be forecast in a moderate and extreme scenario to account for the uncertainty surrounding the recovery from the Pandemic.
The popularity of online grocery will be determined by the duration of the Pandemic and the online grocers' ability to meet demand.
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.
During and after the Pandemic, online Grocers can maximize their performances with innovations like automation, operational flexibility, and bundling services.
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