One in three shoppers will buy groceries online this year, says Unata report

20-Apr-2017 - Last updated on 21-Apr-2017 at 14:23 GMT

Photo: iStock/Ridofranz

E-grocery is no longer a differentiator—it is now a “critical method of doing business,” according to online grocery consultancy firm Unata.

The share of online shopping in the grocery sector is still miniscule compared to other industries, for example, Amazon’s $350m in Q1 grocery sales (annualized to $1.4bn) is just a speck compared to the hundreds of billions in sales that the grocery sector generates. But it’s something retailers and food companies shouldn’t overlook, as one in three consumers will buy their groceries this year, results from an Unata survey revealed.

The Toronto-based firm surveyed 500 consumers in the US in December 2016 to qualify the adoption of e-grocery shopping in 2016 and to project how online grocery shopping will fare in 2017.

They found that in 2016, more consumers bought groceries online than previously projected. It was 18% of respondents in 2016, compared to 8% in 2015. “The number of U.S. shoppers who buy groceries online will grow by more than 60% this coming year, with 31% saying they are “very likely” or “somewhat likely” to buy groceries online in 2017,” the report said.

Not just the Millennials

Though the 18-35 age group often gets credit for being early adopters of all things online, Unata’s survey found that shoppers who bought their groceries through the internet came from all age groups.

In fact, survey results showed that as the older Millennials age and enter parenthood, the age group that said they’re ‘very likely’ and ‘somewhat likely’ to purchase groceries online in 2017 belonged to the 30-44-year-olds group with 33%. This echoes another survey done by Clavis Insights, which revealed that other generations are catching up to Millennials when it comes to online grocery shopping.

And it’s not just about age: “Shoppers across every age, gender and income bracket are similarly likely to shop for groceries online next year,” the report said.

Retention rates: Is it just a one-off thing?

With the doubt surrounding online grocery shopping’s wider adoption (and reluctance of consumers to buy food and beverages from many categories, such as fresh), one may dismiss that the stellar numbers Unata collected are skewed by one-time shoppers using a promo code or trying out a new platform as a one-off thing.

But in response to the survey question ‘Have you ordered groceries online more than once?’ 80% responded with ‘Yes.’ “Retention is projected to be just as high in 2017, with 80% who shopped online in 2016 planning to order again this coming year,” according to the report

“There is a rapidly growing percentage of consumers who want to grocery shop online,” the report added. “And once they have tried it, most keep doing it. Retailers cannot afford to ignore the digital shopper experience anymore or they are at risk of losing this rapidly growing segment of shoppers.”