Table of Contents
Executive Summary
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- Top takeaways
- Market overview
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- Figure 1: Total US sales and fan chart forecast of online groceries*, at current prices, 2015-25
- Impact of COVID-19 on grocery
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- Figure 2: Short-, medium- and long-term impact of COVID-19 on online grocery, May 2021
- Opportunities and challenges
- Help those who need help with online shopping
- Focus on increasing orders from current online shoppers
- Increase orders for quick trips, pending profitability
- Traditional supermarkets risk customers going elsewhere to shop online
- Transform online shopping experience from functional to personalized and fun
- Address trust-related barriers
The Market – Key Takeaways
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- Pandemic sets stage for long-term grocery ecommerce growth
- Grocery ecommerce entails more than foods/beverages, although this is where much of the growth is stemming from
- Down economy drives shoppers to prioritize value; many shop online for this reason
Market Size and Forecast
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- $100+ billion in online grocery sales from here on out
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- Figure 3: Total US sales and fan chart forecast of online groceries*, at current prices, 2015-25
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- Figure 4: Total US online sales of groceries*, at current prices, 2015-25
- Impact of COVID-19 on grocery
Segment Performance
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- Health and beauty comprises majority share, but food and beverages are the growth driver
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- Figure 5: Total US online sales of groceries*, by segment, at current prices, 2015-20
- Figure 6: Total US online sales of groceries*, by segment, at current prices, 2018 and 2020
Market Factors
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- Continued concerns about coronavirus will sway shoppers online for a while longer
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- Figure 7: Concern regarding coronavirus exposure and lifestyle disruption – Any worried (net), March 19-April 2, 2021
- COVID-19 reverses what was a growing trend in favor of food away from home
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- Figure 8: Sales of food at home and away from home, January 2010-February 2021
- Food price increases in a down economy put strain on consumers
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- Figure 9: Average household spending on groceries, 2015-20
- Figure 10: Financial health, by household income, March 31-April 17, 2021
- Mobile shopping continues to escalate
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- Figure 11: Device used to shop online*, October 2020
Companies and Brands – Key Takeaways
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- Retailers and delivery services expand ecommerce capabilities to meet current demands
- Now is the time to ramp up efforts to drive product trial and impulse purchases online
- Opportunity to help shoppers with their health and wellness goals
Competitive Strategies
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- Micro-fulfillment centers popping up everywhere as retailers look to improve order processing
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- Figure 12: Big Y launches online grocery service upon completion of automated micro-fulfillment center
- Retailers actively testing new delivery mechanisms
- Drones
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- Figure 13: Kroger partners with Drone Express for drone delivery in Ohio
- Autonomous vehicles
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- Figure 14: Walmart partners with Cruise for autonomous vehicle grocery delivery pilot
- Keyless entry
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- Figure 15: Hy-Vee Mealtime to Go prepared foods offering
- Figure 16: Walmart partners with Ghost Kitchen Brands to offer foodservice
- Figure 17: Instacart’s “Beyond the cart: A Year of Essential Stories” campaign
- Figure 18: Amazon Prime Now review
- Figure 19: Amazon provides for families facing food insecurity
Market Opportunities
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- Become an online resource for wellbeing
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- Figure 20: eMeals expands the number of integrated grocery retailers
- Figure 21: Walmart’s The Hidden world of Waffles + Mochi culinary viewing experience
- Stimulate discovery of new foods and impulse add-ons
- Consider developing an online marketplace
The Consumer – Key Takeaways
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- Shopping frequency declines as consumers consolidate trips
- eCommerce spikes, but won’t overtake stores
- All product categories experiencing increased online purchases
- Walmart > Amazon for the first time
- Shoppers turn online to save time and money and for the fun of it
- Consumers like the convenience, but are hesitant to relinquish control
- Lists play key role in path to purchase, leading to less impulse purchasing
- Opportunity to anticipate – and provide solutions for – pain points in advance
Grocery Shopping Overview
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- Who’s shopping?
- Nearly all adults grocery shop to some degree
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- Figure 22: Grocery shopping responsibility, by gender and generation, January 2021
- How often they shop
- Shopping frequency down due to pandemic
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- Figure 23: Shopping frequency, by gender and generation, January 2021
- Where they shop
- Significant ecommerce gains amid pandemic
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- Figure 24: Shopping methods, January 2021
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- Figure 25: Shopping methods, by generation, January 2021
- Store remains preferred channel regardless of trip type
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- Figure 26: Preferred shopping method by trip type, January 2021
- The pandemic effect
- Online shopping, stock-ups and trip consolidation represent primary behavioral changes during COVID-19
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- Figure 27: Shopping behaviors during COVID-19, January 2021
Interest in Future Online Grocery Shopping
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- Online shopping will stay high after the pandemic threat ceases
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- Figure 28: Interest in future online shopping among in-store shoppers, January 2021
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- Figure 29: Interest in future online shopping among in-store shoppers – nets, January 2021
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- Figure 30: Interest in future online shopping among in-store shoppers, by generation, January 2021
- A third of online shoppers think they’ll do even more through digital means in the future
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- Figure 31: Anticipated amount of online shopping among online shoppers, January 2021
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- Figure 32: Anticipated amount of online shopping among online shoppers, by generation, January 2021
- Consumers discuss the pros and cons of online grocery shopping
Shopping by Category
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- All categories likely to be shopped online more in future
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- Figure 33: Shopping for major categories – Online versus in-store, January 2021
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- Figure 34: Comfort with buying fresh foods online, by generation, January 2021
Retailers Shopped Online
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- Walmart advances to best Amazon
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- Figure 35: Retailers shopped online, January 2021
- Younger shoppers drive mass merchant online grocery dominance
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- Figure 36: Retailers shopped online, by generation, January 2021
Reasons for Shopping Online
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- Saving time is a given, meaning other factors likely will rise in importance
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- Figure 37: Feeding America discusses impact of increased grocery spending on parents
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- Figure 38: Reasons for shopping online, January 2021
- Millennials drawn by experiential factors
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- Figure 39: Select reasons for shopping online, by generation, January 2021
- Figure 40: Kroger offers easy and shoppable recipes online
Reasons for not Shopping Online More
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- Consumers’ desire for control keeps them from shopping more online
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- Figure 41: Reasons for not shopping online more, January 2021
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- Figure 42: Instacart “Beyond the cart” personal shopper campaign
- Lack of trust is a big barrier
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- Figure 43: Select reasons for not shopping online more, by generation, January 2021
- Battle for share could come down to how delivery fees are managed
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- Figure 44: Attitudes toward delivery costs, by generation and household income, January 2021
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- Figure 45: Walmart removes $35 minimum on Express delivery
Online Shopping Behaviors
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- Consumers seek tools to help them maximize productivity
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- Figure 46: Shipt promotes time and cost savings
- Figure 47: Online shopping behaviors, January 2021
- Millennials more willing to break routines and try new products, services
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- Figure 48: Online shopping behaviors, by generation, January 2021
- Room to grow for personal shopping services
- Consumers provide input into their shopping process
Attitudes toward Online Grocery Shopping
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- Satisfaction with fresh foods key to higher online shopping frequency
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- Figure 49: Attitudes toward food freshness, by generation, January 2021
- Opportunity to address pain points in advance
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- Figure 50: Attitudes toward shopping options, by generation, January 2021
- Consumers want grocery retailers to pay attention to them and their preferences
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- Figure 51: Attitudes toward personalization, by generation, January 2021
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- Figure 52: Albertsons uses Adobe tools to offer more personalization
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Forecast
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 53: Total US online sales of groceries*, at inflation-adjusted prices, 2015-25
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Appendix – The Consumer
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