The pandemic has changed the way we do a lot of things, including the way we shop for groceries. With more people working from home and avoiding crowded places, virtual grocery shopping has become a popular option. There are a few different ways to do it. Some stores have online ordering with curbside pickup, while others offer delivery service. You can also use a grocery delivery service.
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Data for today’s episode is provided by Mercator Advisory Group’s report – U.S. Online Grocery Shopping Takes Off but Remains a Challenging Channel
4 Opportunities and 4 Challenges facing virtual grocery shopping:
- Grocery – the largest retail vertical outside automotive – lags behind e-commerce trends and shoppers online buying behavior
- High costs to investing in technology and fulfillment infrastructure
- Complex delivery logistics – especially perishables
- Consumers ingrained habit of in-store shopping
- Little gain in incremental revenue
- US e-Commerce sales comprise 14.3% of total retail sales in 2018. Grocery accounts for about 2% of total retail e-commerce
- But opportunities for online grocery exist, they include:
- Well-established e-commerce in other verticals
- Consumer desire for convenience and immediacy
- Optimized for high-density population areas
- Partnerships with third-party delivery aggregators
About the report
Driven by growing consumer e-commerce and advances in grocery order fulfillment, U.S. online grocery sales continue to increase to record levels. National and regional grocery chains are making major investments in technology and delivery resources to address this online sales channel. A new research report from Mercator Advisory Group, U.S. Online Grocery Shopping Takes Off but Remains a Challenging Channelassesses current industry challenges and opportunities as well as future considerations and implications for the grocery industry.
“Consumers want convenience and immediacy in their everyday shopping routines. Grocers have been late to the online party, but now they are going all out to support customers that prefer online shopping. But grocery order fulfillment is labor intensive and last-mile delivery is expensive, so the online channel will be financially challenging for grocers.” commented Raymond Pucci, Director, Merchant Services at Mercator Advisory Group, the author of this report.
This report is 14 pages long and has 4 exhibits.
Companies mentioned in this report: Ahold Delhaize, Albertsons, Aldi, Amazon.com, BJ’s Wholesale Club, Costco, Food Lion, FreshDirect, Instacart, Giant, Hannaford, H-E-B, Kroger, Lidl, Market Basket, Peapod, Postmates, Publix, Sam’s Club, Shipt, Smart & Final, Stew Leonard’s, Stop & Shop, Target, Trader Joe’s, Walmart, Wegmans, and Whole Foods.