billion, or 20 percent of total dollar grocery purchases by 2025—the
equivalent of 3,000 grocery stores.
In its annual Grocery eCommerce Forecast, Unata, a Toronto-based
developer of online retail platforms, in partnership with Brick Meets
Click, a consulting and retail advisory firm, suggest that 31 percent of
U.S. consumers are likely to shop online for groceries this year, compared with 19 percent in 2016.
Furthermore, repeat business, a strong indicator of a successful
sales strategy, will be up sharply with 80 percent of respondents who
have bought groceries online doing so again, while 68 percent would
likely switch grocers for a better online shopping experience.
“Online grocery sales is inherently something U.S. consumers
want and need,” says Diana Shaheen, director of retail insights for
Kantar Retail. “This is the engine on the train that can’t be stopped
the momentum is so great. It’s something that will help stores evolve
and I would expect to see online getting to 20 percent of total sales
within the next 10 years.”
Though it could be sooner.
“If Walmart, Kroger and all the major players introduce a click-and-collect model at a rate of one or two stores a day, adoption will be
quick and we could hit 20 percent in five years,” she says.
Observers say the anticipated increase is due to the fact that online
grocery has moved from being a differentiator to an essential part of
the business. “Not only are shoppers turning to digital for their grocery shopping needs, but once they try it they’re likely to keep using
it,” says an official from Unata. “They also expect a lot more from the
online shopping experience and will flock to retailers that do it best.”
However, there is no silver bullet when it comes to online.
“Click-and-collect is only part of a broader ecosystem that
includes being an informational resource, direct ship to homes and
in-store assistance,” says Matt Sargent, senior vice president of retail
for Frank N. Magid Associates, a research-based strategic consulting
firm. “All four will be incredibly important to the online grocer. A
combination of all of them will be key for retailers to see where they
As the breadth of features such as curbside pick-up, home deliv-
ery and shopping list builders offered by retailers in a given market
grows, so does the pool of shoppers who will find something they like
about it and use the services, Unata analysts say.
The question is not only how well a retailer does online, but also
the quality of that experience. Timely delivery is incredibly important not only in pre-purchase decisions, but also in the consumer’s
decision about repeat sales.
“At the end of the day it’s not really about online grocery. It’s simply
about logistics,” says Shaheen. “If there’s one thing most retailers are
good at it’s figuring out logistics.”
In that regard, several names are top of mind. AmazonFresh,
Peapod by Stop & Shop, FreshDirect and now Walmart, whose acqui-
sition of Jet.com—a move that brought one million SKUs to its web-
site along with more than 200 million unique visitors—foreshadows
major changes in the way they are handling their online business.
“Walmart’s acquisition of Jet is the elephant in the aisle,” says Craig
Rosenblum, senior director at Willard Bishop Consulting. “This strategic acquisition not only sends a clear message to Amazon, it enables
Walmart to leverage its physical stores and its distribution assets. In
a positive way, the acquisition is an admission by Walmart that they
can’t compete with Amazon simply by using internal resources.”
A NEW WAY OF THINKING
Unilever’s acquisition of Dollar Shave Club shows how manufacturers
are thinking outside the box and seeking more ways to engage with
shoppers. “Retailers have to figure out the business models that are
different enough from themselves so they can learn from them, but
similar enough to their core business to apply what they’ve learned,”
says Shaheen, noting that this is what Kroger wanted initially when
they went after Harris Teeter. “But now is the time to fill in learning
gaps through acquisition or personnel that have a perspective outside
“The reason Peapod has done such an interesting job is that they
stopped hiring grocery people and began hiring people from the
apparel business, where the online evolution is so much further
ahead,” adds Shaheen. “So 2017 will be the year we hire different peo-
ple to extend the platform into true retail merchandising or acquire a
company that can do it for them like My WebGrocer. Their sole busi-
ness is to make websites look and feel like stores.”
Albertsons is one of the companies moving to fill the knowledge
gap. The chain recently appointed Narayan Iyengar as its senior
vice president of digital marketing and e-commerce, responsible for
the chain’s overall e-commerce strategies including home delivery.
Iyengar, who came from the Walt Disney Co., is a 20-year veteran of
e-commerce and digital business transformations. His appointment
represents a major commitment by Albertsons to expand and enhance
its digital footprint across 19 different retail banners nationally.