Research: Food & beverage represents less than 3% of U.S. retail e-commerce sales
The general food and beverage category (which includes non-perishables) is one of the most underpenetrated within the U.S. e-commerce market.
Grocery apps are some of the fastest-growing apps in the United States, according to an app usage forecast released by eMarketer, New York. This year, 18 million U.S. adults will use a grocery app at least once a month, up 49.6% over last year. For this forecast, the study looked at apps that primarily deliver produce and perishable items, including meal kit services. By next year, more than one in five adult smartphone e-commerce buyers will use a grocery app to order food.
“Shoppers are becoming more comfortable with ordering online in general, and grocery is a part of that,” says Patricia Orsini, senior analyst. “A key hurdle, traditionally, for ordering fresh produce and other perishable items online has been delivery time and the desire to hand-select produce and meat. Retailers have been able to transcend these barriers with click-and-collect models of delivery—order online, pick up in-store. And, if the shopper is ordering from their regular grocery store, familiarity helps them trust that the products will be of the quality they expect. A bad experience, however, could turn consumers off for good, so retailers need to ensure they provide a good experience from Day 1.”
Robust growth for grocery apps is being fueled by the Amazon/Whole Foods merger and Walmart, which is expanding its grocery delivery from six cities to 100 by the end of the year.
“When Amazon acquired Whole Foods last year, Kroger and Walmart, along with other regional chains, stepped up their online grocery efforts,” says Orsini. “Kroger is investing in a number of initiatives around delivery, including partnering with British company Ocado to build high-tech warehouses where grocery orders will be selected and packed by machines. As retailers figure out how to be more efficient with fulfillment, costs for consumers will come down and another barrier to entry will fall.”
The general food and beverage category (which includes non-perishables) is one of the most underpenetrated within the U.S. e-commerce market. At $14.94 billion, food and beverage retail e-commerce sales will represent just 2.8% of all U.S. e-commerce sales this year.
“While the percentage of online grocery sales remains small, it is one of the fastest-growing online categories,” Orsini says. “While no one expects the number of brick-and-mortar grocery stores to seriously decline, the options consumers will have to purchase groceries will increase. Retailers recognize this; they are improving their online offerings in order to retain market share.”
eMarketer’s forecasts and estimates are based on an analysis of quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at publishers, ad buyers and agencies. Data is weighted based on methodology and soundness.