- More than half of all internet users are expected to buy groceries online this year, according to eMarketer.
- The shift is largely driven by shoppers avoiding stores amid COVID-19.
- Latest earnings results by big retailers, including Amazon, Walmart, and Target, highlight the shift.
- Visit Business Insider’s homepage for more stories.
Online grocery is having a big moment this year as the COVID-19 crisis has driven more people to shop online.
That shift in behavior is going to result in more than half of all internet users in the US placing at least one grocery order online this year, either through delivery or pickup, according to research firm eMarketer.
The data, based on estimates from May, show 131 million people, or 52.9% of US internet users, buying groceries online this year, a 41.9% increase from 2019. The number is expected to grow to 141.7 million by 2022, accounting for 55.7% of all internet users in the US.
“The pandemic is driving a bunch of new buyers into online grocery for the first time,” Andrew Lipsman, an analyst at eMarketer, told Business Insider.
The latest earnings reports by the country’s largest retailers highlight this change. Amazon said last month that its online grocery sales tripled from last year. Walmart gave credit to the strong growth in online grocery orders this week for nearly doubling its e-commerce business during the second quarter. Target’s online sales nearly tripled last quarter, while its essential food and beverage category grew about 30%.
Lipsman said he’s more bullish about the online grocery segment because it’s the least penetrated but fastest growing segment in e-commerce. According to a June report, Lipsman estimates the online food and beverage category to account for just 3.7% of total US retail this year, but to grow at a 58.5% clip to $41.5 billion in total sales.
“It’s a huge market and you’re going to see a lot of dollars shift,” Lipsman said.
The biggest winners of this trend are likely going to be the big-name retailers, like Amazon, Walmart, and Target, Lipsman said. Newer delivery services, like Instacart, could also benefit as more brick-and-mortar stores will need a partner to take care of their online shipments. Meanwhile, national and regional grocery chains that haven’t properly built out their online capabilities are most likely to suffer, he said, ceding even more share to their bigger competitors.
“Existing grocers are most challenged because they haven’t properly invested in everything that it takes to maintain their market share,” he said.
View original article here Source