New research forecasts a sea change in how consumers buy food
For Amazon Prime members, of which there are more than 20 million, non-perishable items can now be shipped right to their door with the new service Amazon Prime Pantry. And in the classic Amazon way, the cost to have up to 45 pounds of groceries shipped is low – $5.99 to be exact.
With disrupters like Amazon’s Prime Pantry, Amazon Fresh, Peapod and other new delivery services, grocery stores are finally making the push to eCommerce and digital engagement. In fact, new research released from Published Facts, a leading publisher of market research in the food, beverage, CPG and demographic sectors, relayed an incredibly positive prediction for online grocery shopping. Currently one of the smallest segments for food and beverage sales, online grocery shopping is slated to grow from $23 billion in 2014 to $100 billion by 2019, accruing 8.5 percent of online and offline grocery spending from 3.5 percent today to 12 percent by 2019.
In another research report, produced by Sullivan Higdon & Sink, an advertising and marketing agency focused on the food value chain, editors discussed technology’s impact on how consumers eat, order and research food in the 21st century. And their findings support Published Facts’ forecast for a growing online grocery shopping trend.
According to SH&S:
- The average American spends 23 hours a week online.
- 76 percent of consumers engage in some activity on the Internet related to grocery shopping.
- 25 percent of Americans have checked prices of grocery products online, up from 11 percent two years ago.
- Now, 50 percent of consumers say they get more cooking ideas online than anywhere else, and over a quarter (27 percent) reference their mobile phone more than a recipe book.
- 41 percent of Americans have now looked up a recipe online before going to the grocery store.
- 26 percent of consumers currently order food from a restaurant online.
- 14 percent of consumers follow a restaurant on social media, with moms, dads and millennials all more likely than the average American to do so.
- While 18 percent of moms, who are the typical grocery shoppers, follow brands on social media, over one in five fathers (22 percent) do also.
- Nearly half of Americans agree (49 percent) that technology has impacted the way they find restaurants and other sources of food.
So when it comes to buying food, consumers are warming up to the conveniences that come from online shopping. And they're relying on more than just the expected grocery-related online activities, like price-checking and looking up recipes, they're also trying out services like Plated. Discovered on Shark Tank by Mark Cuban, Plated delivers pre-portioned, high-end ingredients to make gourmet meals featured on the Plated website. With Plated's ability to fulfill the eCommerce factor of convenience, it's grown from 75 to 200 employees in the past year.
So as habits continue on the digital shift, it's safe to assume that more startups like Plated will emerge and grow. Packaged Facts, however, reminds grocery business leaders that there there will also be challenges along the way.
“Looking ahead, online grocery business has unique challenges as it strives to reach its potential,” a Packaged Facts press release relayed. “However, Packaged Facts anticipates that over the next five years, online grocery service providers will develop models that solve the logistics problems while being profitable for the operators. As this happens, online services will become more widely available throughout the country and consumers will become more confident in shopping for food and beverages online. It's expected for these developments to take place in leaps and bounds as, for example, Amazon Prime Pantry rolls out across the country, AmazonFresh spreads to more cities, and more retailers get on board the United States Postal Service's planned delivery system.”
To discuss the potential of expanding your online grocery sales activities, contact the team at NetSphere Strategies. Or, stay tuned to the NetSphere Strategies blog where we aim to keep business leaders in the know regarding the direction that online grocery shopping is taking.