Mercator Perspectives

Online Groceries — You Might Be Surprised

Every time I mention online groceries, eyes roll and executives start checking email. Sure, right, tried that, been there, but...a recent study indicated that 16 percent of consumers have made a purchase through their TV (something I wrote about last year), as discussed in this Mobile Commerce Daily article. And, as television viewing migrates from cable TV sets to all sorts of untethered Internet devices, those statistics will continue to climb.

The fact is that consumers are getting more and more comfortable purchasing just about anything online and that includes groceries. Now, this doesn't mean we won't run to the store to pick up eggs and milk and produce, but consider how much of the groceries we buy are non-perishable - including cleaning products and paper goods. This got me thinking about online groceries and I began to look into exactly how do work. What I found was a little company in Vermont called MyWebGrocer (MWG). If you click on the link we've provided here, you'll find a list of 110 grocery stores around the country that use their applications including Albertson's, Kroger, Piggly Wiggly, Fred Meyer, and ShopRite.

As we know, supermarket transactions are a core debit transaction category, but if consumers' aren't comfortable using their debit card online, how will they pay for their online groceries? I'm not suggesting that supermarket transaction activity is going to be upended (right now), however, this is another indicator of the need for financial institutions to address the fact that consumers' worry about protecting their everyday money in a card-not-present environment. The opportunity for debit card issuers is to begin to more actively promote the use of their cards in an online environment by talking about risk management, offering alerting tools to consumers, and creating product sets that enable consumers to feel safe about using their money online.

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