Online Grocery Retailing - US - May 2021

OVERVIEW
What you need to know
Key issues covered in this Report
Definition
Market context
Economic and other assumptions
COVID-19: US context
EXECUTIVE SUMMARY 
Top takeaways
Market overview
Figure 1: Total US sales and fan chart forecast of online groceries*, at current prices, 2015-25
Impact of COVID-19 on grocery
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 
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 
$100+ billion in online grocery sales from here on out 
Figure 3: Total US sales and fan chart forecast of online groceries*, at current prices, 2015-25
Figure 4: Total US online sales of groceries*, at current prices, 2015-25
Impact of COVID-19 on grocery
SEGMENT PERFORMANCE 
Health and beauty comprises majority share, but food and beverages are the growth driver
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 
Continued concerns about coronavirus will sway shoppers online for a while longer
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
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
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
Figure 11: Device used to shop online*, October 2020
COMPANIES AND BRANDS – KEY TAKEAWAYS 
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
Micro-fulfillment centers popping up everywhere as retailers look to improve order processing
Figure 12: Big Y launches online grocery service upon completion of automated micro-fulfillment center
Retailers actively testing new delivery mechanisms
Drones
Figure 13: Kroger partners with Drone Express for drone delivery in Ohio
Autonomous vehicles
Figure 14: Walmart partners with Cruise for autonomous vehicle grocery delivery pilot
Keyless entry
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 
Become an online resource for wellbeing
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  
Shopping frequency declines as consumers consolidate trips 
eCommerce spikes, but won’t overtake stores
All product categories experiencing increased online purchases
Walmart &gt; 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 
Who’s shopping?
Nearly all adults grocery shop to some degree
Figure 22: Grocery shopping responsibility, by gender and generation, January 2021
How often they shop
Shopping frequency down due to pandemic
Figure 23: Shopping frequency, by gender and generation, January 2021
Where they shop
Significant ecommerce gains amid pandemic
Figure 24: Shopping methods, January 2021
Figure 25: Shopping methods, by generation, January 2021
Store remains preferred channel regardless of trip type
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
Figure 27: Shopping behaviors during COVID-19, January 2021
INTEREST IN FUTURE ONLINE GROCERY SHOPPING
Online shopping will stay high after the pandemic threat ceases
Figure 28: Interest in future online shopping among in-store shoppers, January 2021
Figure 29: Interest in future online shopping among in-store shoppers – nets, January 2021
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
Figure 31: Anticipated amount of online shopping among online shoppers, January 2021
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
All categories likely to be shopped online more in future
Figure 33: Shopping for major categories – Online versus in-store, January 2021
Figure 34: Comfort with buying fresh foods online, by generation, January 2021
RETAILERS SHOPPED ONLINE 
Walmart advances to best Amazon
Figure 35: Retailers shopped online, January 2021
Younger shoppers drive mass merchant online grocery dominance
Figure 36: Retailers shopped online, by generation, January 2021
REASONS FOR SHOPPING ONLINE 
Saving time is a given, meaning other factors likely will rise in importance
Figure 37: Feeding America discusses impact of increased grocery spending on parents
Figure 38: Reasons for shopping online, January 2021
Millennials drawn by experiential factors
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
Consumers’ desire for control keeps them from shopping more online
Figure 41: Reasons for not shopping online more, January 2021
Figure 42: Instacart “Beyond the cart” personal shopper campaign
Lack of trust is a big barrier
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
Figure 44: Attitudes toward delivery costs, by generation and household income, January 2021
Figure 45: Walmart removes $35 minimum on Express delivery
ONLINE SHOPPING BEHAVIORS
Consumers seek tools to help them maximize productivity
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
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
Satisfaction with fresh foods key to higher online shopping frequency
Figure 49: Attitudes toward food freshness, by generation, January 2021
Opportunity to address pain points in advance
Figure 50: Attitudes toward shopping options, by generation, January 2021
Consumers want grocery retailers to pay attention to them and their preferences
Figure 51: Attitudes toward personalization, by generation, January 2021
Figure 52: Albertsons uses Adobe tools to offer more personalization
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Forecast
Consumer qualitative research
Abbreviations and terms
Abbreviations
Terms
APPENDIX – THE MARKET 
Figure 53: Total US online sales of groceries*, at inflation-adjusted prices, 2015-25
APPENDIX – THE CONSUMER