A new option for online purchasing has been grocery shopping. Amazon has merged its AmazonFresh and Prime Now operations and reduced the number of regions in which it offers AmazonFresh. Offline, it has acquired Whole Foods Market and launched the Amazon Go convenience store format.
And in response, Walmart and Kroger have raced to establish hundreds of new grocery collection points, and many regional grocers have joined them by trialing or rolling out grocery pickup services. Target acquired delivery provider Shipt, and Walmart bought logistics startup Parcel. In addition, a number of grocery retailers signed agreements in 2017 to offer delivery via Instacart,including Kroger, Publix, Albertsons, Food Lion and Stop & Shop, as well as regional chains Superior Grocers, Stew Leonard’s and Best Market.
Despite these new online grocery options, Coresight Research in its “U.S. online grocery consumer survey” found that online grocery market retailers do not have full-shop customers. And although Amazon has the most online grocery shoppers, it is established grocery retailers such as Walmart that are pulling in consumers looking to complete bigger-basket, full-assortment grocery shops.
The online grocery market is disproportionately small relative to the number of consumers who say they shop for groceries online. Some 23.1 percent of all shoppers surveyed said they had bought groceries online in the past year, but most online grocery shoppers actually spend very little of their grocery budgets online:
- Approximately one-third of respondents said they had purchased “almost none” of their groceries online in the past 12 months — i.e., they made just one or two online grocery purchases over the period.
- A further 38 percent said they had purchased only “a small amount” online — which was defined in the survey as less than one-quarter of all their groceries.
- Only 14.3 percent of online grocery shoppers said they had bought more than half of their groceries online in the past 12 months.
Coresight Research estimates that e-commerce will account for only about 2.4 percent of total food and drink retail sales this year. This is equivalent to sales of around $23 billion in a market approaching $1 trillion in value.
Amazon is by far the most-shopped retailer for online groceries. Some 59 percent of online grocery shoppers surveyed said they had bought from Amazon in the past year, versus 26 percent for second-place Walmart. However, that does not mean that shoppers turn to the site for their regular grocery shopping. In fact, a number of data points suggest that shoppers tend not to use Amazon for conventional, full-basket grocery shopping, while they do tend to visit Walmart.com for such shopping.
To read the full report, click here.