Is Online Grocery Meeting its Saturation Point | Hillphoenix

Fresh Thinking - Blog

Is Online Grocery Meeting its Saturation Point

Is Online Grocery Meeting its Saturation Point

Concept of internet retail illustrated by a minaiture shopping cart parked on the keyboard of a laptop. Small parcels made from cardboard  is in both in and outside the cart.

Online grocery has been an extension to our everyday lives in one way or another, especially during the Covid lockdowns. Fast forward to today — grocery e-commerce platforms play a key role for consumers and retailers worldwide in terms of conveniently meeting our food supply needs. These platforms have come to serve as a viable channel for food retailers to showcase their food products.

With the accelerated adoption and use of technology in the food retail space, it comes as no surprise that numerous online grocery platforms are sprouting up in different sizes and formats. Whether it’s your local organic grocer or big players such as Walmart and Target, everybody seems to be wanting a share of the online grocery pie and to join in the digital shift. 

Coming out of a pandemic and experiencing record-high inflation, is online grocery still a thing, or is it slowly meeting its saturation point?

By the Numbers

According to Insider Intelligence (a provider of expert marketing analysis and insights consulting), digital grocery sales in the US will grow to $147.51 billion this year and is primed to become a $243 billion market by 2025. Since online grocery sales exploded in 2020, due in large part to the pandemic placing it squarely in the limelight, it is expected that online grocery consumer growth in the years to come won’t match or exceed the growth numbers seen in 2020. Based on new research from ChaseDesign (a website design and internet marketing service consultant), online grocery shopping, in general, is declining due to the cost premium affected by these inflationary times. Grocery shoppers continue to favor in-store grocery shopping as we are seeing the easing of the pandemic. A sizeable percentage of purchases still occurs in physical stores as shoppers are desiring the in-person grocery shopping experience and choosing the products they like without having to pay a premium for subscription and delivery.

How Grocers Can Improve Their E-commerce Strategy

With the shift in consumer shopping behavior, retailers are constantly challenged to up their game to improve the breadth and effectiveness of their e-commerce strategy. Since e-commerce platforms are a way for food retailers to showcase their assortments and provide their customers the avenue to conveniently purchase food products, grocers should work to enhance the overall grocery shopping experience. This can be done through personalization, offering loyalty programs, special promos, and coupons.  Ultimately, since digital grocery shoppers are predominantly purchasing online for convenience, seamless integration of the shopping journey from login to checkout should be a priority for retailers.

The extensive benefits of using e-commerce platforms in the food retail landscape have been heavily demonstrated in these past few years. Though its demand cannot be as significant in the years ahead as the effects of the pandemic now begin to wane, online grocery platforms should continue to coexist with their brick-and-mortar stores for retailers to maximize customer draw and correspondingly gain significant market share. With the millennial population being the major user of digital grocery shopping, these e-commerce platforms will allow retailers to meet customers, across demographics, wherever they are.

Despite post-pandemic forecasts showing a slowing of platform growth versus what the industry witnessed during the height of the pandemic, grocery e-commerce still has a promising future. If there was a silver lining for food retailers because of the pandemic, it was the fact that significant advancements in technology were accelerated, bringing additional value to their operations. When the correct tools and strategies are paired together with the right execution, it is safe to say that online grocery will continue to exist as a viable option for consumers in the future.

Share on facebook
Share on twitter
Share on linkedin
Share on email

Fresh Thinking...

Close Menu