Study: Online grocery to at least triple in next 10 years

The U.S. online grocery industry has strong potential for growth, but it also has several obstacles to overcome.

Online grocery penetration in the U.S., which currently stands at a mere 3%, is expected to at least triple in the next decade, according to a survey of more than 8,000 U.S. grocery shoppers by Bain & Co. and Google. One of the reasons for today’s small penetration rate is frequency. While 25% of consumers surveyed said they used an online grocery service in the last year, only 26% of those users — or 6% of all consumers — they have been placing online orders more than once a month.

The findings of the “Omnichannel Grocery is Open for Business – and Ready to Grow,” survey suggest that obtaining repeat business is crucial to omnichannel grocery success. Among online grocery shoppers who say they have shopped online for groceries just once in the past 12 months, 42% report that the online experience saved them time. Sixty-three percent of online grocery shoppers who have shopped for groceries online three times said that online grocery shopping saved them time compared to an in-store trip, a 50% increase from those who have shopped online once.

The survey also asked respondents who had not used an online grocery service in the past year which one they would select if they had to give it a try. Almost all (96%) said they would look first to a traditional brick-and-mortar retailer for home delivery, and 85% said they would select a store they already visit. Only 17% of all consumers surveyed say they have tried a new retailer in their area within the last three months, and only 25% said they are likely to try a new retailer for a routine grocery trip. Seventy-five percent of online grocery shoppers say they are still using the first online grocer they tried.

"Online grocery shopping in the U.S. trails that of other e-commerce categories in large part because our grocery shopping habits are so deeply ingrained, and online grocery retailers haven't yet convinced customers that grocery shopping online can be a better experience," said Stephen Caine, a leader in Bain & Company's Retail practice. "Traditional grocers have decades of experience optimizing their physical stores to align with how shoppers think – training them to navigate store shelves to easily find what they are looking for, making it easy for them to make trade-offs between products, and providing inspiration when they want to try something new. Online grocery shopping has not yet found a way to digitally replicate these cues simply and intuitively."

Responses to questions about voice assistants indicate their usage rate in online grocery shopping is low, but delivers positive results. Only 4% of online grocery shoppers say they have adopted voice assistants on dedicated devices for grocery planning, much lower than the estimated 23% to 32% of U.S. adults who own smart speakers. But adopters are using them frequently – 66% of grocery shoppers who use voice assistants say they use the tool weekly or more frequently for grocery planning.

“Although the shift online will rapidly accelerate, we anticipate that the majority of grocery spend is still expected to occur in physical stores in 2030," said Caine. "The winners in this changing grocery landscape will be the retailers that can deliver frictionless omnichannel experiences, investing in digital experiences and tools that save time for consumers shopping online or in the store."