America’s online grocery shopping expected to grow 40% by end of 2016

Posted by AFN Staff Writers on 21st September 2015

American online grocery shopping is predicted to grow from $15 billion to $21 billion by the end 2016, a new report shows.

The ‘Groceries 2.0’ study has reported 2013 Forrester Research which shows that America’s online grocery shopping market is equal to US$15 billion of a US$1 trillion market.

Despite a slow uptake when compared to online sales in other retail industries, the report estimates that online shopping will increase to a US$21 billion by the end of 2016.

The Groceries 2.0 report, compiled by data collection company Field Agent, lists a variety of reasons why grocery shoppers have been hesitant to embrace shopping online.

One key concern raised was the inability to touch, smell and feel fresh food products purchased online – the study showed shoppers were far more likely to purchase items such as alcohol, canned goods and bathroom products than fresh produce, dairy and meat.

Other concerns raised included missing out on in-store promotions and discounts, and time- and location-sensitivity for delivery options.

Walmart’s online shopping success

The report named US giant Walmart as an example of an upward trend towards online grocery shopping in the US. A pick-up service launched by the chain in 2014 has reported good results with 41 per cent of users saying they would definitely use Walmart’s pick-up service again and 38 per cent of first-time users saying they would recommend it to friends.

Lessons to be learnt from Walmart

Using Walmart as an example, the report identified six challenges and opportunities for the chain’s pick-up service:

Marketing is key: The pick-up service has not yet been rolled out to all parts of America. Due to this Field Agent only surveyed the areas in which the service was accessible. Just within these areas only 46 per cent of respondents had actually heard of the service. The report however suggests that advertising efforts may not be strong as the service is still being tested.
Consider timing: Half of first-time users said delivery took longer than expected.
Products need to be available online: Only 36 per cent of people surveyed who had used the service said everything they wanted was available through the service.
Shoppers are pocketing money instead of looking for a substitution: Out of those who could not find what they were after 32 per cent said they did not go looking for a substitution product.
Still having to go to the shops: Close to half (44 per cent) of shoppers said that they still needed to go within the store despite using the online service.
Online shopping concerns still exist: The same type of issues for generally avoiding online grocery shopping was listed for those listing reasons why they might avoid Walmart’s pick-up service in the future, e.g. afraid of missing out on sales and not being able to touch, smell and see products.