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ONLINE GROCERY SHOPPING - US - AUGUST 2018

Published By :

Mintel

Published Date : Aug 2018

Category :

Retail

No. of Pages : N/A

Despite doubling from 2013-18, online grocery sales in the US remain a small proportion of total grocery sales and an even smaller proportion of total eCommerce. Unlike other major product categories, adoption of online shopping in this sector has been slow, namely due to consumers’ strong preference to shop in-store, coupled with concerns about food arriving fresh and undamaged upon delivery. Still, as with total eCommerce, online grocery ordering will increase, with younger generations leading the way.

Table of contents
OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
Overview
The issues
Grocery is the anomaly when it comes to eCommerce
Figure 1: Total US online sales of groceries*, at current prices, 2013-18
Online grocery shopping still seen as too risky
Figure 2: Top five reasons for not shopping on grocery store websites, April 2018
Perishables least likely to be purchased online
Figure 3: Least likely food/drink items to be purchased online, February 2018
The opportunities
Younger consumers will lead grocery eCommerce
Figure 4: Interest in future online shopping, by age, April 2018
Leverage the physical store
Figure 5: Shopping preferences, April 2018
Focus on what consumers are actually buying online
Use incentives and satisfaction guarantees
Figure 6: Influencers to encourage more online shopping, April 2018
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Online grocery picking up steam
Long runway for food and drink online sales to grow
US population changes impact online sales
More purchasing on smartphones
MARKET SIZE
Small market, big opportunity
Figure 7: Total US online sales of groceries*, at current prices, 2013-18
MARKET BREAKDOWN
Opportunity lies with food and beverages
Figure 8: Total online sales of groceries, by segment, at current prices, 2013-18
Figure 9: Total US retail sales of Online Grocery Shopping, by segment, at current prices, 2016 and 2018
MARKET FACTORS
Broader eCommerce trends impact grocery sector
Millennials take on more grocery shopping responsibility
Households with children on the decline
Figure 10: Shopping methods – Multi-channel shoppers, by parental status, April 2018
America’s increasing diversity could impact online marketplace
Figure 11: Shopping methods – Multi-channel shoppers, by race and Hispanic origin, April 2018
Americans are trying to eat healthier
KEY PLAYERS – WHAT YOU NEED TO KNOW
Meal kit companies are growing quickly, but total sales remain low
Floodgates open as retailers go “all in” on fulfillment
Non-online shoppers avoid the channel out of routine, fear, and reluctance to pay more
Drivers not required to deliver orders; shoppers not required to be home to get them
Mastering the last mile
Voice-activated assistants gain ground
COMPANY SALES OF ONLINE GROCERY RETAILERS
Meal kit subscription services among fastest growing food/drug companies
Figure 12: Food/drug retailers in top 500, 2018
Figure 13: Fastest growing food/drug companies, 2018
WHAT’S TRENDING?
Maniacal focus on delivery and store pickup services
In their words
WHAT’S STRUGGLING?
Consumers like shopping online, but still prefer shopping in-store
Figure 14: Reasons for not shopping on grocery store websites, April 2018
Figure 15: Reasons for not shopping for food and drink products online, April 2018
In their words
Types of information expected
Freshness concerns
WHAT’S NEXT?
More innovative means of delivery
Tackling the food quality barrier
The third dimension: ordering by voice
In their words: future of online grocery
The next level of blended online and offline experience
THE CONSUMER – WHAT YOU NEED TO KNOW
Less than a quarter of consumers typically shop online
Time and money savings drive consumers online
Non-perishables and non-food and non-drink on top; perishables fall to the bottom
Not a straight shot to the checkout screen
Online shoppers prefer orders to be delivered over picking them up at the store
Trial incentives and freshness guarantees could move skeptics to action
SHOPPING METHODS
Online shopping currently a small piece…
Figure 16: Shopping methods, April 2018
…but future looks brighter
Figure 17: Interest in future online shopping, April 2018
A closer look at multi-channel shoppers
Figure 18: Multi-channel shoppers, by generation, April 2018
Figure 19: Multi-channel shoppers, by parental status by gender, April 2018
Figure 20: Multi-channel shoppers, by area, April 2018
Saving time and money main reasons to opt online
Figure 21: Purchase drivers, by category, March 2018
In their words: consumers explain their shopping preferences
CATEGORIES PURCHASED VERSUS NOT PURCHASED ONLINE
Coffee/tea most likely to be purchased online; perishables fall to the bottom
Figure 22: Items purchased and not purchased online, February 2018
In their words
Non-food categories are an opportunity for more trial of online shopping
Figure 23: Importance of online retailers’ non-food product selection, April 2018
SHOPPING PREFERENCES
Nurturing the customer relationship from the start
Figure 24: Preference regarding number of retailers shopped, by select demographics, April 2018
Physical stores still play a role
Figure 25: Preference regarding physical stores, by select demographics, April 2018
Loyalty to savings
Figure 26: Loyalty to price versus brands, by select demographics, April 2018
SHOPPING PROCESS
Path to purchase is a journey, not a destination
Figure 27: Shopping process, April 2018
Comparison shopping made easy via digital channels
Figure 28: Comparison shopping behaviors, by select demographics, April 2018
In their words
IN-STORE PICKUP AND DELIVERY PREFERENCES
Online shoppers prefer delivery over store pickup
Figure 29: Delivery versus store pickup preferences, by age and area, April 2018
Consumers’ thoughts on in-store pickup
Consumers’ thoughts on delivery
Figure 30: Delivery preferences, April 2018
Figure 31: Delivery preferences, by select demographics, April 2018
INFLUENCERS TO ENCOURAGE MORE ONLINE SHOPPING
Re-evaluating pricing strategies could yield gains
Figure 32: Influencers to encourage more online grocery shopping, April 2018
Freshness guarantee is white space opportunity
Figure 33: Influence of freshness guarantees on online shopping, by region, April 2018
Discounts and freshness guarantees could reach over six in 10 shoppers
Figure 34: TURF analysis – Influencers to encourage more online shopping, April 2018
Online sampling could draw in more brand advocates
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Consumer survey data
TURF methodology
Consumer qualitative research
Direct marketing creative
Abbreviations and terms
Abbreviations
APPENDIX – THE MARKET
Figure 35: Total US online sales of groceries*, at current prices, 2013-18
Figure 36: Total US online sales and forecast of groceries*, at inflation-adjusted prices, 2013-23
Figure 37: Total online sales of groceries, by segment, at current prices, 2013-18
Figure 38: Distribution of population, by age and race/Hispanic origin, 2018
Figure 39: Households, by presence of own children, 2007-17
Figure 40: Population by race and Hispanic origin, 2013-23
APPENDIX – KEY PLAYERS
Figure 41: Amazon Go store, Seattle, May 2018
Figure 42: Walmart direct mail, in-store pickup, March 2018
APPENDIX – THE CONSUMER
Figure 43: Interest in future online shopping, by shopping frequency, April 2018
Figure 44: Table – TURF analysis – Influencers to encourage more online shopping, April 2018
Additional qualitative research

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