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Data for today’s episode is provided by Mercator Advisory Group’s Report: Online Grocery: Grocers Meet the Challenge of Digital Demand, but Can They Do It at a Reasonable Cost?
Winners & Losers of the 2020 Online Grocery Frenzy:
- Walmart was the top performer in the online grocery market in 2020, bumping Amazon from the number one spot.
- Even so, Walmart’s market share in online grocery shrank from 30.4% to 30% in 2020.
- Amazon’s share of online grocery shrank from 32.6% to 27.1%.
- Meanwhile, Ahold Delhaize’s online grocery sales grew over 100% to $2.37 billion in 2020.
- Albertsons rode the tailwinds of the online grocery frenzy, seeing a 243% increase in growth in Q2 2020.
- One of the largest movers in the vertical las year was Instacart, which saw sales growth of over 500% YoY in the first half of 2020.
Although online grocery struggled against other online verticals prior to 2020, recent growth shows the online grocery vertical is here to stay. As consumers shopped online due to COVID-19, online grocery growth outpaced the rest of the e-commerce segment. Given recent consumer sentiment, Mercator predicts growth will remain strong in the coming years. Grocers were able to match consumer demand by utilizing cost-saving investments and implementing innovative technology to facilitate fulfillment. While consumers expressed the desire to continue shopping online, they also noted pain points with online grocery shopping. Given the new growth in this budding industry, Mercator believes that merchants and payment processors have the ability to gain market share by implementing cost effective fulfillment strategies and facilitating technology-driven payment methods. A new research report from Mercator Advisory Group, Online Grocery: Grocers Meet the Challenge of Digital Demand, but Can They Do It at a Reasonable Cost? explores the trajectory of the online grocery market and the ways in which merchants and payment processors can take advantage of consumer sentiment to cut costs and drive sales.
”The pandemic-driven, stay-at-home lifestyle in 2020 propelled U.S. online grocery sales to record volume as consumers sought ease of ordering, seamless payment, and convenient delivery. As the Great Reopening occurs in 2021, online grocery shopping will remain popular among consumers. Grocery merchants and their payments vendors can benefit from this digital channel opportunity, but must meet the challenges of online order fulfillment,” commented Raymond Pucci, Director, Merchant Services at Mercator Advisory Group, and author of this report.