The future is already here. Yet, we neither see cars floating in the air nor spend vacations on Mars. However, can you imagine the reaction of some guy back in the 1920s when you tell him how you commonly use your laptop to order food, and it is delivered right to your front door?
Table of contents:
Who buys groceries online?
Where do people order groceries online?
What foodstuffs do people order online?
What stops people from doing groceries online?
Key tips for selling groceries online
How to order groceries online?
Online food shopping future
Who buys groceries online?
It is easy to say that young people are the ones who order groceries online as they are the main net surfers. But it is not that simple. Even though the generation that has not seen the world without the web is already here, most of the people still see online grocery shopping as something new. Who are those pioneers already taking advantage of foodstuff delivery convenience?
Who shop for groceries online in the United States?
Like the milkman used to do in the past, many retailers now offer to bring groceries right to your house. It seems convenient, doesn’t it? No more long queues or carrying heavy bags. The growth figures are also quite promising. US Online Grocery Survey shows that about 36.8% of the US consumers purchased their groceries online this year compared to 23.1% in the previous one [1].
The number of people who want to give it a try in the US is growing, especially among the digitally active young people. 30% of Millennials and 28% of Generation Z claim to order their groceries online from time to time. Some older people also checked out this opportunity and have tried at least once – 22% of Generation X, 17% of Baby Boomers, and 9% of Silent Generation.
Online grocery shopping has become a real lifesaver for the people who are sick of overcrowded regular supermarkets. Especially, right before the holidays. Many have got used to this necessary evil over the years. However, today, there is no need to waste time wandering through the twisted maze of shelves looking for milk anymore.
It should come as no shock that 14% of Americans who have underage kids choose for online grocery shopping [2]. For them, it can really be cheaper than regular supermarket shopping. We all know how kids usually add a lot of candies and snacks to the cart.
There is a pretty common misconception that absolute majority of grocery shoppers are women, but nowadays it is no longer true. In the US, men tend to take on a full share of family responsibilities. Also, more men live alone now since many younger adults are delaying marriage and family formation. More than 40% of the grocery shoppers are men, and 60 percent of them have ordered groceries online at least once [3]. However, there is also bad news for marketers. Buying groceries, men tend to spend less and buy fewer items, both online and offline, compared to female shoppers.
Who are the Brits shopping for groceries online?
The British are the biggest online grocery shopping spenders in Europe. The share of grocery orders in the UK is more than 30% of all online purchases [4]. New people every day discover the convenience of spending less time in the supermarkets.
Online grocery shopping is a common choice among the educated in the UK. In 2018, food and groceries made up about 30% of online spendings for people with high formal education. Medium formal education graduates spent on it about 23%. The ones who have no formal education spend on groceries 17% of total online spend.
This factor is closely connected to the two others – income and employment. Full-time working people with above-average income buy food online much more often than those who are unemployed, have a part-time job, or earn less.
Millennials enthusiastically take advantage of buying groceries online full-on. 61% of them claim to have some of their groceries delivered, mostly non-perishable products and beverages. 27% of Millennials order online almost everything they eat at home. On the other hand, Generation X, Baby Boomers, and Silent Generation are not that active. 35% of them order some foodstuffs online, but most are still reluctant to give grocery delivery a try [5]. Especially when it comes to ordering perishable products.
In 2018 online grocery sales all over the UK reached $14.8 billion, up 9% from 2017. These numbers are only increasing. By the end of 2019, sales are expected to hit $16.4 billion. The Statista researchers think that by 2020, the UK will become the second-largest online grocery market worldwide after China [6].
Where do people order groceries online?
The number of online grocery shoppers is increasing, and the delivery services keep the pace.
Where do American consumers order groceries?
In the United States, names of the most popular grocery deliverers are not new to anyone – Amazon, Walmart, Kroger, and Target. So far, even these massive companies have not crafted a perfectly working strategy for selling groceries online in the United States. They are trying out different tactics.
Amazon Fresh has become the first Amazon attempt to sell groceries in the US. Initially, it was far from what we can call a successful attempt. Since 2007, Amazon Fresh has lost money every year. After a decade, Amazon hammered out a new plan. In 2017, they bought the Whole Foods supermarket chain to start selling their groceries offline. It may seem they accepted the defeat in selling them online, but it is not the case.
Take a look at Walmart and their online delivery growth projections. 82% of online grocery shoppers in the US use Walmart delivery service [7]. The main reason for such popularity that we can single out is Walmart’s store footprint. There are 5,352 Walmart stores all over the States. It means that it has a store within 10 miles of 90% of American households.
2019 Forbes research shows that 90% of shoppers said they would buy groceries online from their current grocery store [8]. Shopping offline in Walmart stores, they trust their delivery too. People do not want their milk to be delivered from some warehouse miles away.
But what about Amazon? It is definitely not cool with the second place and 35% of shoppers. Bloomberg reported that the company is planning to open 3,000 offline Amazon Go stores by 2020. Establishing their offline presence among American grocery stores, they work for the future. It resolves the problem of fresh product delivery and is meant to win public trust.
Where do people in the UK buy groceries online?
The UK online grocery shoppers are spoiled for choice. The broad range of popular options includes Amazon, Sainsbury’s, Tesco, Ocado, and Morrisons [9].
Amazon grocery delivery, including Amazon Pantry and Amazon Fresh, is catching on in the UK. While Pantry focuses on packaged items such as crisps, and chocolate, Amazon Fresh suggests same-day delivery of fresh food.
Their major competitors are Sainsbury’s and Ocado. They are known for the environmentally-friendly approach. Both of them suggest bagless delivery and so-called “green slots” option when you get your order only when the delivery car is nearby. Tesco is popular for last-minute small purchases since they have no minimum spend. Morrisons made a successful bid for delivering not only groceries but also clothes.
Magento-based online grocery stores
Nowadays, there are many different ways to manage your webstore. Having a progressively growing business, you need a reliable solution. One of the most popular options among the retailers is Magento. Born back in 2007, it has won numerous hearts with its outstanding functionality and broad set of features suitable for any kind of business.
Magento platform is the choice of many popular online grocery shops, including the following:
1. Based in the UK, Muscle Food was created by Darren Beale. Started as a company selling bodybuilders’ food supplies, nowadays it is a huge web store specialized in healthy food. One of the main benefits of the company is that it provides shipping all over the UK. Numerous enthusiastic fitness fans helped the company grow. Helping people achieve their dream body goals, Muscle Food is more than a webstore, it is a lifestyle.
2. New York Grocery is one of the top online grocery stores in New York. It is a marketplace that connects local stores from your neighborhood and ensures you get the best fresh products, beverages, and even flowers. New York Grocery enchants your grocery shopping experience, making it possible for you to order everything you need after a few clicks.
3. Born in France, Monin is well-known for their syrups. However, it is not the only thing this company sells. Since the day it was found back in 1912, Monin has been developing their unique approach to fruit purees, toppings, cocktail ingredients, and many other things. One of a kind, their products are 100% natural, made out of berries and herbs. Monin has decided to start its way with Magento and did not regret it – with the help of Magento, their sales increased by over 400%.
4. BellaItalia is a family business started back in 2012. Over the years, the company grew and morphed into a huge business delivering Italian foodstuffs all over Europe. Their prime goal is to make sure that any Italian food lover can prepare favorite pasta no matter where they are. Extending the business to the US, Laura, the owner of the company, was willing to make the Italian immigrants all over the words feel like home.
5. Z Natural Foods is a company based in the US. Since 2008, it has been providing numerous customers with healthy food from the most trusted brands. Caring most about its clients, the company puts all its products on tests in accordance with Good Manufacturing Practices and Hazard Analysis Critical Control Points.
These stores are so different, but they all found themselves comfortable in the hands of Magento.
What foodstuffs do people order online?
What stops people from doing groceries online?
The main reasons why people do not want to give online grocery shopping a try are the following:
1. Quality and freshness worries are the biggest barriers. Someone else is making a choice for you picking fruits, vegetables, and even deli. 73% of the people who refuse online grocery shopping want to choose fresh products themselves.
2. Delivery charges stop 24% of shoppers.
3. Minimum spending levels are too high for 18%.
There are also a lot of people who turn away from online grocery shopping after the first order. Unfortunately for retailers, not many of them are ready to give it a second chance. Mainly because their experience left much to be desired. More than 63% of shoppers had issues with their orders at least once last year. The most common complain is missing products – 26% of shoppers faced this problem. Well-known concern on receiving stale bread or mold fruits also has grounds – 24% of shoppers had out-of-date or short-life items delivered. 20% were frustrated by damaged products and late deliveries.
Key tips for selling groceries online
1. Make your website mobile-responsive. Urban shoppers using public transport order delivery more often, compared to people from suburban areas who get around by car. It means that many people place their orders on the way to or from work using their mobile phones.
2. Remember that the first impression is critical. If your customers are happy with their first order, there is a high chance that they will not look for other options. 75% of online grocery shoppers still use the same delivery that they tried for the first order [10].
3. Suggest free delivery for the first order. Since many are concerned about high delivery charges, try to make their first online grocery shopping experience with your store as enjoyable as possible.
4. Set up digital coupons and reward programs. Create an extra motivation for them to choose you over their regular supermarket.
5. Discover customers’ interests and concerns. For example, if you offer organic, vegan, or vegetarian foodstuffs, your clients may be interested in bagless products or environmentally-friendly delivery.
6. Let your customers see the history of their orders. They will appreciate saving time spent on looking through the website every time they want to order their favorite cookies.
7. Create a sharable cart. In many families, both parents take part in making up shopping lists.
8. Offer diet plans and recipe ingredient sets. We live in a century when more and more people get concerned about what they eat. Frozen prepared meals slowly take a back seat – cooking kicks into high gear.
9. Make sure to have an expiration date information and ingredients list clear on the website. 78% of online shoppers are afraid to receive out-of-date products. Since a lot of people are allergic, 70% want to be sure there will be no unexpected ingredients.
How to order groceries online?
Online food shopping future
The statistics bode well for online grocery shopping. In 2018, in the United States only, the sales hit $26.0 billion, and by the end of 2019, this number is expected to increase up to $36.2 billion [12]. We can see that online grocery sphere is rapidly growing. Digitally native Generation Z is gaining in purchasing power. Once they come closer to the family formation age, we can expect them to take advantage of online grocery shopping even more than Millennials.
Multinationals such as Amazon and Walmart realize that demand is growing hand in hand with competition. To cut down the costs and speed up the fulfillment and delivery, they heavily invest in automation. Yet, we cannot predict whether this will lead to the boom in missing product complaints or not.
Amazon is planning to overdeliver Walmart going offline, but the second does not want to give up. Two months ago, Walmart launched an in-house delivery testing program. Now you can get your groceries delivered not only to your house but right inside your fridge. Let Walmart install a smart lock on your door, and set delivery time. Wearing a camera to ensure your property safety, their employee will use one-time code on the lock and deliver your order in-house.
Kroger announced they start using robot-driven warehouses and self-driving delivery vehicles in Texas. Thousands of successful deliveries in Arizona has already proved their use worthy. However, online growth puts smaller chains at risk. If 8% of the grocery market moves online, it is likely to drive one-third of all grocery stores off a cliff [13].
You probably remember that frenzy around voice ordering at the beginning of 2018. People got excited and thought that the future of online grocery shopping belongs to this embryonic technology. However, by now, we can see that it fell short of the expectations. By the end of 2019, over 50% of consumers do not see the point in voice ordering, and only 3.1% of shoppers purchased something using it [14].
Conclusion
To conclude, we can say that online food shopping is going to reach new frontiers sooner than it seems. Even though many claims that it only puts a lug on retailers, the numbers prove that it has great potential. However, it is too early for old-school supermarkets to take a back seat. There are still a lot of people who do not want to give online delivery guys a chance to pick fresh fruits and meat for them. Remember – young digitally-native customers grow up. The competition in the online grocery market is high, and you have to be creative to stand out.
[1] https://coresight.com/research/us-online-grocery-survey-2019/
[2] https://news.gallup.com/poll/240569/grocery-shopping-shortcuts-aren-everyone-bag.aspx
[3] https://www.inmar.com/press-release/inmar-analytics-survey-sheds-light-on-mens-online-grocery-shopping-behavior/
[4] https://www.forbes.com/sites/ninaangelovska/2019/04/27/who-are-the-top-online-grocery-shoppers-in-europe/#53616f555b46
[5] https://www.mintel.com/press-centre/retail-press-centre/brits-spent-12-3-billion-on-online-groceries-in-2018
[6] https://www.statista.com/topics/3144/online-grocery-shopping-in-the-united-kingdom/
[7] https://info.fieldagent.net/hubfs/Campaigns/Groceries_2.0/Groceries%202.0%20V.3/Groceries2.0-V3-Report.pdf
[8] https://www.forbes.com/sites/stephenmcbride1/2019/04/24/online-grocery-shopping-will-go-mainstream-as-soon-as-this-year-and-2-stocks-will-rake-in-billions/#7a554c473c2f
[9]
https://www.techadvisor.co.uk/feature/internet/best-online-food-shopping-uk-3636669/
[10]
https://www.thinkwithgoogle.com/consumer-insights/online-grocery-shopping-behavior/
[11] https://markets.businessinsider.com/news/stocks/survey-finds-that-few-older-americans-grocery-shop-online-but-lowering-hurdles-could-sway-manyonline-shoppers-eager-for-food-information-but-often-come-up-empty-1027399620
[12] https://www.businessinsider.com/the-online-grocery-report-2019-1
[13] https://www.forbes.com/sites/stephenmcbride1/2019/04/24/online-grocery-shopping-will-go-mainstream-as-soon-as-this-year-and-2-stocks-will-rake-in-billions/#23a1f5e53c2f
[14] https://www.onespace.com/blog/2018/08/online-grocery-food-shopping-statistics/
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