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Online grocery sales set to explode

The online grocery market is just getting started.

Online sales of groceries more than tripled between 2013 and 2018, according to new report from Packaged Facts. The study forecasts that online grocery sales will more than quadruple as online options become more available and consumers become more open to buying groceries online.

Amazon and Walmart are currently the top players in the online grocery market, according to “Online Grocery Shopping in the U.S., 2nd Edition,” with the two retailers accounting for nearly 28% of online grocery sales. Other key players are Instacart, Kroger, FreshDirect, and Peapod.

Packaged Facts said that Walmart's dominance as a grocer, combined with its nationwide presence large number of rural locations, give it a competitive advantage in expanding online grocery shopping to much of the U.S. population.

Other findings from the report include:

• After Amazon’s June 2017 acquisition of Whole Foods, the online grocery market has been changing rapidly as store-based grocers have raced to compete with Amazon in the online grocery space;

• Walmart is taking drastic measures to expand its online grocery services and offer store pickup options at all of its stores across the U.S. in order to become the top online grocery provider;

• Pickup is becoming a favored option for receiving online orders to solve the last-mile delivery problem;

• Creating online marketplaces and collaborating with local producers can convince more customers to shop for groceries online if they are supporting local businesses; and

• Baby Boomers and the Silent Generation are least likely to do their grocery shopping online, but represent a major marketing opportunity because they may have mobility issues that limit their ability to drive to a store or to carry groceries.

"Three key factors have created a perfect environment for growth of the online grocery market in the U.S. over the last five years," said David Sprinkle, research director for Packaged Facts. "There's been increased use of mobile phones and smartphones, interfaces for websites and mobile apps have improved, and there's been a notable expansion of crowdsourced business models to shopping and delivery."

To read the full report, click here.
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