Shifts in the Online Grocery Market

November 12, 2018

The way people shop for their groceries online is changing.

Earlier this year, Brick Meets Click released its How the Online Grocery Market is Shifting 2018 study surveying U.S. consumers on their online grocery habits. They found that the amount customers spend on orders and how often they buy online is going up.

We will highlight key findings from this study that related to online grocery spending habits, online grocery order frequency and loyalty to online grocers.

Spending

Online grocery spending is taking up a growing share of total grocery spending.

Online spending is expected to grow 10 times faster than spending in a physical grocery store. Online’s share of total grocery spending increased 22% from 2017 to 2018. Here’s the rundown of online’s annual share of total grocery spending:

2022 forecast: 8.2%

2021 forecast: 7.6%

2020 forecast: 7.0%

2019 forecast: 6.4%

2018: 5.5%

2017: 4.5%

2016: 3.4%

The amount of weekly online grocery shopping is also going up. The online share of total weekly grocery spending increased 61% from 2017 to 2018. Brick Meets Click said that most of the spending growth will come from the 1 in 3 households that already buy some groceries online.

The average order value is up 11% from 2017 to 2018. This year, shoppers spent an average of $69 per online order. In 2017, that average was $62 per order.

Key Takeaway: Brick and mortar grocery stores are far from extinct. The 1/3 of U.S. grocery shoppers who already grocery shop online will account for most of the online grocery growth, so grocers shouldn’t be seeing physical stores devoid of customers anytime soon. However, these numbers do show that the core group of online grocery shoppers are increasing in their spending, suggesting that they are phasing out shopping in a physical grocery store.

Frequency

How often are shoppers buying their groceries online and which age group or groups is driving the online grocery shopping boom?

On average, shoppers order groceries 2.15 times per month. This is a 1% increase from 2017, when the average consumer bought groceries online 2.13 times per month.

How likely is it that a shopper will buy groceries online in the next 3 months?

50% not likely at all

29% extremely to moderately

21% slightly

Although the same age group (30-44 year-olds) had the biggest share of monthly order activity in 2017 and 2018, the 18-29 year-old age group experienced the most growth. The monthly order activity by age group for the last 2 years is listed below.

2018:

22% of 18-29 year-olds

26% of 30-44 year-olds

19% of 45-59 year-olds

16% of 60/older

2017:

19% of 18-29 year-olds

27% of 30-44 year-olds

22% of 45-59 year-olds

19% of 60/older

Key Takeaway: 1 in 2 shoppers are likely to buy their groceries online in the next 3 months. Online ordering is most popular with shoppers between ages 18 to 44. In fact, grocery shoppers ages 18-29 saw the most growth in monthly online order activity from 2017 to 2018.

Loyalty

Most online grocery shoppers shop at just 1 online provider. For comparison’s sake, consumers shop at an average of 4.1 physical stores for groceries every month.

80% of online grocery shoppers shop at just 1 online provider.

15% uses 2 online grocery providers

4% use 3 online grocery providers

1% use 4 online grocery providers

Which online grocery provider is most prevalent?

54% shop at Amazon

19% shop at mass merchants

18% shop at supermarkets

10% shop at all others

8% shop at club stores

7% online delivery platforms

5% shop at meal kit providers

69% of online shoppers said they were extremely or very likely to use the same service again. Whether or not they found everything they needed and received everything they ordered had a direct impact on whether or not customers would use the same online shopping service again.

4 in 5 shoppers found everything they wanted to buy. Shoppers had the easiest time finding items from meal kit providers, Amazon and mass merchants. They had the most difficulty finding what they were looking for online from supermarkets and online delivery platforms.

88% received everything they ordered. Amazon, meal kit providers and mass merchants had the highest levels of order accuracy while supermarkets and online delivery platforms had the least order accuracy.

Key Takeaway: Supermarkets need to improve their order accuracy and their internal search capabilities if they want to keep online grocery shoppers happy.

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