A recent report found online grocery shopping, lead by wealthy and young shoppers, will expand to 11% of total U.S. grocery spending by 2023—a significant increase from the current 3.3%, as reported by the International Business Times.
The report, "Six Degrees of Digital Connections," by Brick Meets Click, surveyed more than 22,000 shoppers across six retail brands, and identified wealthy and young shoppers are fueling the adoption of online grocery shopping, who represent about one-fifth of all grocery shoppers. Currently, 10% of U.S. grocery shoppers regularly buy food and produce online.
The report concluded wealthy shoppers opted for online shopping for rare natural, organic and artisanal products to save time, while young shoppers are already accustomed to online shopping for other purchases. Young shoppers, however, will be more sensitive to added delivery costs since they spend the least per month on groceries.
Amazon.com, Inc., was reported the most popular single source for online grocery purchases, serving 39% of online shoppers, compared with 28% by all other grocery retailers.
Brick Meets Click Principal Bill Bishop told IBTimes in order to sway the remaining population to shop online for groceries, supermarkets must keep the cost of online grocery shopping no more than 10% over traditional shopping cart totals. Current price difference in larger cities, like New York, range from 15% to 20% more due to complex delivery and distribution models.
In certain markets prone to be more tech-savvy, like San Francisco, online grocery shopping is already higher, accounting for 6% percent of total spending, according to Bishop. New online grocers in San Francisco include Instacart, Good Eggs and ventures from Safeway, Inc.
Although one-tenth of the market migrating to online groceries may not seem like much, Bishop said the impact on notoriously thin profit margins in the industry could be severe. “There will be markets that will experience significant disruptive impact, if online goes over 10%," he said to IBTimes.
Other changes on the grocery shopping front include a consumer preference towards warehouse clubs and other retail channels like drugstores, dollar stores and limited assortment chains.
The report, "Six Degrees of Digital Connections," by Brick Meets Click, surveyed more than 22,000 shoppers across six retail brands, and identified wealthy and young shoppers are fueling the adoption of online grocery shopping, who represent about one-fifth of all grocery shoppers. Currently, 10% of U.S. grocery shoppers regularly buy food and produce online.
The report concluded wealthy shoppers opted for online shopping for rare natural, organic and artisanal products to save time, while young shoppers are already accustomed to online shopping for other purchases. Young shoppers, however, will be more sensitive to added delivery costs since they spend the least per month on groceries.
Amazon.com, Inc., was reported the most popular single source for online grocery purchases, serving 39% of online shoppers, compared with 28% by all other grocery retailers.
Brick Meets Click Principal Bill Bishop told IBTimes in order to sway the remaining population to shop online for groceries, supermarkets must keep the cost of online grocery shopping no more than 10% over traditional shopping cart totals. Current price difference in larger cities, like New York, range from 15% to 20% more due to complex delivery and distribution models.
In certain markets prone to be more tech-savvy, like San Francisco, online grocery shopping is already higher, accounting for 6% percent of total spending, according to Bishop. New online grocers in San Francisco include Instacart, Good Eggs and ventures from Safeway, Inc.
Although one-tenth of the market migrating to online groceries may not seem like much, Bishop said the impact on notoriously thin profit margins in the industry could be severe. “There will be markets that will experience significant disruptive impact, if online goes over 10%," he said to IBTimes.
Other changes on the grocery shopping front include a consumer preference towards warehouse clubs and other retail channels like drugstores, dollar stores and limited assortment chains.
