E-commerce

Online grocery sales will hit $250B in five years, claims report

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October 5, 2020

Online grocery sales will account for 21.5% of total grocery sales by 2025, reflecting a value of $250 billion.

The figure represents a 60%-plus jump compared to pre-COVID-19 estimates, according to research from Mercatus, a digital commerce solutions provider, conducted in collaboration with research firm Incisiv. Online grocery shopping adoption has nearly doubled in two years.

The research surveyed nearly 60,000 American shoppers regarding grocery shopping behavior, according to a press release.

Additional findings include:

• While 40% of online shoppers are likely or very likely to continue to purchase via online channels, 78% of all shoppers still prefer to visit a brick-and-mortar grocery store either to shop in store or for curbside pickup.
• Despite the high growth in online adoption, most grocery shoppers still profess loyalty to retailers and online brands that have a physical store presence.
• Post-pandemic success will go to those retailers who can best bridge both online and offline shopping journeys and provide a seamless experience with minimal friction points.

"With close to 60,000 respondents across the U.S., we analyzed more than 48 million data points and found that shoppers are highly satisfied and loyal to their preferred grocery store, but this loyalty does not extend to the online channel," Amar Mokha, COO and benchmarking lead, Incisiv, said in the release. "While the adoption rate of online grocery has increased significantly, grocers need to improve pickup and delivery slot availability, promotion and coupon availability, and product substitutions to improve customer loyalty online."

Older population groups (45 years and older) have made the most dramatic shifts to online shopping with 46% adopting a new fulfillment method (such as curbside) and 35% ordering groceries online for the first time, according to the research.

"This comprehensive survey proves that COVID-19 has fundamentally changed the way shoppers approach their grocery options — so much so that we now expect to see online sales reach an unprecedented $250 billion by 2025," Sylvain Perrier, Mercatus president and CEO, said in the release. "The growth of online grocery in 2020 and its predicted long-term impact, coupled with customers' continued loyalty to brick and mortar, makes it clear that these avenues must complement each other in creating a great customer experience across a grocer's entire brand. In order to round out the loyalty to online channels, this data makes it clear that brands should make investments in digital functionality, especially regarding product search, discovery and product information."