Online grocery shopping could grow five-fold over the next decade, with American consumers spending upwards of $100 billion on food-at-home items by 2025, according to a recently released report. Supermarket giants Wal-Mart Stores and Kroger already draw sales from their online efforts and compete with Amazon and other e-commerce challengers, but the report from Food Marketing Institute and Nielsen points out that the online channel is likely to capture significantly more market share in the decade ahead from the bricks-and-mortar stores.
Around a quarter of American households currently buy some groceries online, up from 19% in 2014, and more than 70% will engage with online food shopping within 10 years, according to “The Digitally Engaged Food Shopper” report. It also found that of those who will buy digitally, 60% expect to spend about a quarter of their food dollars online in 10 years. The report also found Millennial shoppers surveyed were more willing to buy groceries online in the future than other consumer groups. It also pointed out that roughly 3 in 5 grocery shoppers today are looking for sales or coupons on their mobile devices before entering the store and that just over half will use mobile apps to shop at the store. Grocery shopping will reach digital maturity and saturation faster than other industries that went online before, such as publishing or banking, said the report. Younger, newer and more engaged digital shoppers adopt digital technologies more quickly, and will hasten the expansion of digital grocery shopping further.
The battle between Amazon and Wal-Mart
Indeed, the number of U.S. households getting groceries digitally has risen significantly in recent years, fueled by increasingly tech-savvy millennial consumers and retailers offering the convenience of both delivery and so-called click-and-collect service. In the United States Amazon and Wal-Mart are battling for the main share of e-commerce sales. Amazon sales have grown to over US$85 billion while Wal-Mart’s online sales are at US$12.5 billion (US$13.5 billion globally). In overall retail sales Wal-Mart’s sales are four times greater than Amazon but as future sales for e-commerce show only increase growth, that gap is expected to close in the coming decade, especially as Amazon expands outside the United States.