Shopper Marketing - June 2017 - 32
THE FUTURE OF ONLINE GROCERY
mong today's food marketers and retailers alike, the sixty-four
thousand dollar question is: What role will the supermarket
play in the future of online grocery? The answer is a mixed
bag, according to a January 2017 report from Nielsen and the Food
Marketing Institute, "The Digitally Engaged Food Shopper."
While the report does not envision the demise of traditional brickand-mortar grocery stores, it does predict some sweeping changes.
For example, it sees an expansion of fresh-food areas such as service
delis, bakery and meat departments, and a reallocation of centerstore space currently devoted to items like canned goods (for which
sales are expected to shift faster to online) to the backroom of the
store. Currently, about one-quarter of all U.S. households buy some
groceries online, up from 19% in 2014, per the report.
Bill Bishop, chief architect at the Barrington, Illinois-based research
firm Brick Meets Click, says it is important for marketers to distinguish consumers who regularly buy groceries online from those who
occasionally engage in the behavior for some grocery products that,
for whatever reason, they choose not to buy in a store. "Online grocery shopping is increasing in both of these categories, but we see it
happening faster in the second one," notes Bishop. To the extent that
shoppers are still hesitant about buying groceries online, an established supermarket chain like Kroger might retain a "home field advantage" over other types of retailers, he says.
Forecasts of the online grocery market vary widely. The most optimistic projections have online grocery sales growing at a compound
annual rate of 20% over the next five years, reaching as high as $177
billion by 2022, according to research firm Cowen. That is considerably faster than the average 12% rate predicted for the overall ecommerce category, per Cowen. Its data revealed that consumers
age 25 to 34 were the biggest buyers of online groceries last year,
and the firm says that trend will continue into the future.
y SHOPPER MARKETING JUNE 2017