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Online Grocery Shopping 2019The Battle Lines Are Clearly DrawnAccording to eMarketer, total 2019 US food and beverages online sales will be $22.63 billion, a 23% increase from 2018, and then total $40.04 billion by 2022; however, the 2019 total is only 2.6% of the approximately $880 billion in food and beverage sales. Although Amazon looks far ahead of Walmart in the table below, new Citi Research finds Walmart is gaining, as 24.6% of consumers said they ordered groceries online from Amazon during the past 12 months, and 22.5% from Walmart.As online grocery shopping has been increasing at more than 20% annually and will continue to do so through 2021, the number of click-and-collect locations at major grocery retailers increased 70% to 5,800 during the June–December 2018 period. Top 10 Digital Retailers, by E-commerce Grocery Sales, 2018RetailerTotalChangeRetailerTotalChange#1: Amazon$8.20 B+12.5%#6: Costco$880 M+12.0%#2: Walmart$2.84 B+10.1%#7: FreshDirect$670 M+3.8%#3: Kroger$1.51 B+66.0%#8: Blue Apron$670 M-24.2%#4: Ahold$1.17 B+2.6%#9: Albertsons$590 M+4.9%#5: HelloFresh$960 M+41.0%#10: Target$420 M+28.9%eMarketer (Supermarket News), June 2019Profile of the Online Grocery ShopperAccording to the 2K19 Valassis Coupon Intelligence Report, 77% of online grocery shoppers are 18–44, with those 25–44, 60%. They are more likely to be male, have children in the household and have an average household income of $80,900.Food Marketing Institute (FMI) reported in its 2019 U.S. Grocery Shopper Trends that 43% of all consumers said they shop online occasionally, with 21% who buy groceries online monthly (11%) or at least every two weeks (10%).The Valassis report also revealed online grocery shoppers use coupons at a much higher rate than all consumers, or 65% and 45%, respectively, as well as loading e-coupons to a loyalty or frequent shopper card, or 60% and 40%, parison of All Consumers vs. Online Grocery Shoppers’ Ordering Choices*, 2019ChoicesAll ConsumersOnline Grocery ShoppersFrom a local grocer to pick up at the store15%41%Delivered to home from a local grocery store via Shipt, Google Express or Instacart15%42%Home delivery from Website, such as Peapod, FreshDirect, AmazonFresh or 16%41%Valassis, March 2019*once or several times a weekConsumers’ Attitudes and HabitsDespite robust growth in online grocery sales, a recent study from Vixxo found 87% of consumers prefer to buy their groceries in a store and TABS Analytics reported only 17% of consumers it surveyed preferred online shopping. As often cited, selecting one’s own groceries, especially meat and produce, continues to be the top barrier to more online sales. In its Groceries 2.0/Vol. 3 report, Field Agent found this was the primary concern of 58% of the surveyed consumers.The perceived cost of buying groceries online is another primary concern, as 51% of consumers in the Field Agent study said they aren’t able to use coupons and in-store discounts and 43% were concerned about fees and required minimum purchases.Grocery Products Consumers Are Moderately Likely to Buy Online, June 2019ProductPercentProductPercentFeminine hygiene76%Bread50%Toothpaste75%Fresh milk46%Breakfast cereal71%Ready-to-eat items43%Canned vegetables/fruit/soup70%Whole, fresh bananas41%OTC medicines70%Ice cream/popsicles/frozen treats41%Potato chips/salty snacks68%Fresh, not frozen chicken breasts39%Alcoholic beverages60%Tomatoes39%Chocolate58%Field Agent, June 2019CPG PerformanceAs the table above and other sources indicate, CPG products sell well online, although they still only increased 9% YOY (February 2018–2019), with those in the grocery category increasing 16% and household care increasing 19%.The online-grocery-shopping environment is allowing a number of new products to disrupt their categories and grab market share from traditional CPG products, with Kewpie, a Japanese mayonnaise, as an example, increasing YOY sales 115%.Conversely, some well-known CPG products in the detergent category, for example, are maintaining their prominence in online sales, with Tide achieving a 21.1% purchase rate during February 2019, compared to newcomer Solimo at just 5.4%.Organic Toothpaste Buyer Index, April 2019ProductPercentProductPercentJASON (more likely to buy)112%Paradontax (more likely to buy)13%Cali White (more likely to buy)43%Sensodyne (less likely to buy)5%Crest (more likely to buy)37%Arm & Hammer (less likely to buy)8%Rembrandt (more likely to buy)28%Colgate (less likely to buy)17%Tom’s of Maine (more likely to buy)16%Hitwise, April 2019 *for 12 weeks ending 4/13/19 and compared to standard online populationGrocers Must Evolve with Online Food SalesAll the evidence clearly indicates online grocery shopping will only increase, as the Field Agent study revealed 66% of consumers expect to be buying more groceries online by 2024, and 21% said “much more.”The challenge for traditional grocery retailers (and what consumers are expecting) is continued improvement in customer service, 68%; quality of delivered fresh food, 67%; convenient delivery windows, 66%; and low prices, 66%.IDC states in its Personalization in Digital Food Retail report that retailers must invest in data management and analytics, personalized offers and promotions, localized assortment optimization and advertising/media spending during the next three years.Products Shoppers Are Buying Online Now or Likely to Buy During 2019 Compared to Retailers’ Perception of Their Migration Online by 2024, December 2018ProductShoppersRetailers’ PerceptionProductShoppersRetailers’ PerceptionMeat48%23%Dairy56%17%Delicatessen56%24%Shelf-stable categories76%30%Fresh fruit/vegetable53%21%General merchandise81%31%Bakery55%16%Home products82%39%Frozen55%25%Health & beauty products84%38%IDC, December 2018 Fulfillment and Delivery TrendsIt should be apparent by now that delivery services influence where consumers shop for groceries online; in fact, according to Capgemini Research Institute’s report, The Last-Mile Delivery Challenge, 40% of consumers consider it a “must-have.”The good news for US grocery retailers is the Net Promoter Score (NPS) for consumer satisfaction with delivery services was a +9, while the cumulative NPS in all the countries in the Capgemini study was -9.Last-mile delivery satisfaction drives future purchases, as 74% of satisfied consumers would buy 12% more from their preferred retailer while 48% of dissatisfied consumers would stop purchasing from retailers with an inadequate last-mile delivery process.Estimated Order Value of Monthly Consumer Purchases from Those Satisfied and Dissatisfied with Home Delivery Services, October–November 2018Product or CategorySatisfiedDissatisfiedProduct or CategorySatisfiedDissatisfiedHousehold/Cleaning44%31%Pet care53%38%Pharmaceuticals46%41%Shelf-stable foods59%46%Health, beauty and personal care49%40%Chilled foods61%50%Alcohol52%47%Baby care67%43%Frozen foods52%42%Fresh foods72%67%Capgemini Research Institute, 2019 Additional AnalysisWalmart, Amazon and Kroger may be accelerating their grocery-pickup services for in-store and online shoppers – and receive most of the media coverage – but a number of lesser-known regional grocers are adding online ordering, pickup and/or delivery services.Field Agent, for its Groceries 2.0/Vol. 3 report, conducted mystery shopping trips of four of these regional grocers and rated them on a 5-point scale. Mystery-Shopping Ratings of Four Regional Groceries, 2019CriteriaBuehler’s Fresh Foods (Ohio)Foodland Farms (Hawaii)Rosauers Online Express (Spokane)Super 1 Smart Click (Montana, Idaho)Online-shopping experience3.83.74.03.3Pickup site navigation/ease of use5.04.74.03.7Freshness of fresh produce4.54.75.05.0The overall pickup service4.34.03.54.0Field Agent, June 2019Food and Beverage Products US Online Food Buyers Purchased During March 2019ProductMenWomen18–3435–5455–64AllPackaged snack foods (chips, cookies, candy, etc.)45%65%64%56%43%56%Dry/Baking goods (cereals, flour, sugar, pasta, mixes, etc.)28%45%44%40%23%37%Non-alcoholic beverages (soft drinks, juice, etc.)34%36%40%36%27%35%Canned/Jarred goods (vegetables, spaghetti sauce, etc.)25%35%36%33%18%31%Prepared foods35%24%33%31%18%29%Frozen foods20%28%32%23%16%25%Fresh fruits or vegetables (not frozen)16%30%29%27%11%24%Bread or baked goods (sandwich bread, bagels, etc.)16%27%29%24%9%23%Eggs or dairy19%26%32%23%9%23%Fresh meat or poultry (not frozen)16%19%29%15%5%18%Alcoholic beverages14%14%19%15%2%14%Fresh fish or seafood (not frozen)9%7%12%9%0%8%Ice2%2%4%1%0%2%Other22%14%14%15%27%17%eMarketer, April 2019Please read the complementary Profilers, Supermarkets & Food Stores 2019, Health & Organic Food Markets 2019 and The Grocery Shopper 2019 for more supermarket/food stores industry information and trends.Sources: eMarketer Website, 7/19; Grocery Dive Website, 7/19; Yahoo Finance Website, 7/19; Valassis Website, 7/19; Field Agent Website, 7/19; Supermarket News Website, 7/19; TABS Analytics Website, 7/19; Hitwise Website, 7/19; Precima Website, 7/19; Capgemini Website, 7/19.Updated: July 2019? 2019 Media Group Online, Inc. 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