Grocery e-commerce has a lot of headroom for growth with only 7% of U.S. consumers shopping online for groceries in the past month, reports The NPD Group, a global information company. Consumers who are lapsed from grocery shopping online or have never shopped for online groceries point out a number of barriers to their adoption of online grocery shopping, the top reason being that they want to pick out their own fresh items.
Amazon’s recently announced purchase of Whole Foods will help overcome this barrier for Amazon Prime members (52% of online grocery shoppers are Amazon Prime members), active online shoppers, like young adults and men, and urban consumers; but there remains a large sector of the population that will continue to be served by brick and mortar grocery stores.
NPD predicts that online grocery shopping will grow at a faster rate than the early online pioneers as consumers have already experienced the convenience of online shopping. In fact, 20 million consumers who are current, lapsed, or new to online grocery shopping plan to increase their virtual shopping for foods and beverages over the next six months, according to the NPD study, “The Virtual Grocery Store.” However, in addition to selecting their own fresh foods, many consumers simply like the experience of grocery shopping in a brick-and-mortar store, saying that walking the store reminds them of what else they need or they like to see what’s new. Other barriers are the higher costs associated with grocery shopping online, like delivery or membership fees, and needing to wait for the delivery—which Amazon’s purchase of Whole Foods could change.
“Brick-and-mortar stores aren’t dead, they will just need to step up their game,” said Darren Seifer, NPD food and beverage industry analyst. “There will continue to be a large percentage of the population who will prefer to shop at brick-and-mortar grocers. Brick-and-mortar food retailers should market the unique consumer needs they meet that online grocers aren’t currently offering, experience being a key one. At the same time, they need to keep up with the times and leverage digital ordering via their own click-and-collect programs as well as partnering with third parties for delivery in order to expand their offerings.”