Study finds that most consumers still want to buy groceries in stores

According to a recent Forbes.com story, The Food Marketing Institute estimates that online grocery sales will reach $100 billion by 2025, or about 20% of the grocery retail market. Today it is estimated that 2.0% to 4.3% of industry sales originate online.

Amazon currently leads the way in the online grocery market, with an 18% share as of December 31, 2017.

However, a new study by Morning Consult revealed that a majority of Americans prefer the in-store shopping experience over online shopping when it comes to groceries. According to the study, 65% of consumers say they have no interest in buying food and beverages online, even when their options improve.

The study (conducted in May among 2,200 American consumers) also found the following:

• One-third of those surveyed had previously purchased food or beverage products online at least once. 
• Early-adopters of online grocery shopping consist of high-income shoppers ($100k+; 45% have purchased groceries online), GenXers (39%), middle-income shoppers ($50k - $100k at 38%), men (38%), millennials (38%), and urbanites (36%).
• Of the consumers who have ordered groceries online, 56% have only done so a few times per year.
• Of those shoppers that purchase groceries online on a weekly basis, middle-income shoppers are way ahead of those with high incomes. Affluent shoppers prefer to shop in physical stores for their weekly groceries. And since typical affluent households spend 75% more on food than the average shopper, the study describes them as store shoppers that really matter. These high-income consumers have remained loyal to shopping for groceries in person.

Based on the findings, Morning Consult stated that enhancing the in-store shopping experience is the bigger opportunity that food retailers are overlooking in their race to home delivery of online orders.

According to Morning Consult, "By trying to push more grocery sales online, retailers are depriving themselves of the opportunity to entice shoppers to spend more in-store through attractive displays, strategic merchandising, helpful and friendly personnel and mouth-watering sight, smell and taste experiences that can only be found in-store. Just go to any Wegmans to see how exciting and fun grocery shopping can be. This is where grocery stores can really clean up."

Big gains seen in online grocery shopping

According to a Supermarket News story published yesterday, industry experts say that both consumers and retailers are becoming more comfortable with online grocery ordering. As a result, online grocery sales could be poised for significant gains in 2017.

Brick Meets Click CEO Bill Bishop cited his company's research indicating that active online grocery users nearly doubled from 11% of households in 2013, to 21% of households in 2015. Furthermore, he expects that usage may have doubled again since then.

According to Bishop, growth factors include the increasing availability of the offerings, new features available to consumers from more online providers, lower prices fueled by increased competition, and a customer base that's learning how to more efficiently use the services offered.

Robin Michel, a veteran of the grocery industry, said that retailers are "plowing ahead" in pursuit of online grocery despite their reservations about its profitability. On the other hand, independent and midsized operators have been slow to enter the fray, as they worry about the costs involved, the return on investment, and the impact it may have on their store operations.