Online grocery will account for 21.5% of total grocery sales by 2025, an estimated $250 billion, representing more than a 60% increase compared to pre-pandemic estimates.
That’s according to a survey of nearly 60,000 U.S. grocery shoppers by Mercatus in collaboration with Incisiv, which found that online grocery shopping adoption has nearly doubled since 2018. However, the survey also revealed that 78% of all shoppers still prefer to visit a brick-and-mortar grocery store,
“Despite the high growth in online adoption, most grocery shoppers still profess loyalty to retailers and online brands that have a physical store presence,” the report stated. “Post-pandemic success will go to those retailers who can best bridge both online and offline shopping journeys and provide a seamless experience with minimal friction points.”
The survey, “eGrocery’s New Reality: The Pandemic’s Lasting Impact on U.S. Grocery Shopping Behavior,” found that 30% of shoppers changed their preferred shopping destination during shelter-in-place norms created by the pandemic. Of these shoppers, 60% have moved from one brick-and-mortar store to another, and 40% shifted to other online shopping options.
The traditional drivers of preference (proximity/location, value, product quality and convenience) have not changed during the pandemic, according to the survey. But shoppers have been less price sensitive as product availability has taken precedence. Lack of product availability (56%) and concerns over safety protocols (33%) were the biggest reasons for customers shopping elsewhere.
• The top three reasons shoppers have shifted to online shopping are COVID-19 concerns (62%), convenience (62%) and time savings (42%). Additionally, 66% of all respondents who shop online rate real-time inventory visibility as very important.
• Compared to brick and mortar, there is far less loyalty for pure-play online retailers with only 8% of shoppers switching to an online-only operator such as Amazon.
• Older population groups (45 years and older) made the most dramatic shifts to online shopping with 46% adopting a new fulfillment method (e.g. curbside) and 35% ordering groceries online for the first time.
“The growth of online grocery in 2020 and its predicted long-term impact, coupled with customers’ continued loyalty to brick-and-mortar, makes it clear that these avenues must complement each other in creating a great customer experience across a grocer’s entire brand,” said Sylvain Perrier, president and CEO, Mercatus.” In order to round out the loyalty to online channels, this data makes it clear that brands should make investments in digital functionality, especially regarding product search, discovery and product information.”