Grocery apps are some of the fastest-growing in the U.S., according to eMarketer. In 2018, 18 million U.S. adults will use a grocery app at least once a month, up 49.6% over 2017. By 2019, the firm predicts more than one in five adult smartphone e-commerce buyers will use a grocery app to order food.
Grocery app growth is being fueled in part by the Amazon and Whole Foods merger, as well as Walmart’s expansion of grocery delivery to 100 cities by the end of 2018. In order to stay competitive with these retailers, regional grocers are stepping up their online strategies. For example, Kroger partnered with UK online grocer Ocado to build high-tech warehouses where grocery orders will be selected and packed by machines. Additionally, as retailers figure out how to be more efficient with fulfillment, costs for consumers will drop and another barrier to entry will fall, says eMarketer senior analyst Patricia Orsini.
Grocers are increasingly using click-and-collect delivery to address consumers’ concerns with delivery time when ordering fresh produce and other perishables online, as well as their desire to hand-select produce and meat, Orsini says. In addition, if the shopper is ordering from their regular grocery store, familiarity helps them trust that they will receive quality products.
But despite grocery apps’ rapid pace of growth, food and beverage online sales are expected to make up just 2.8%, or $15 billion, of all U.S. online sales in 2018. As the online grocery category grows, there will be even more options for consumers, and retailers will recognize they must enhance their online offerings in order to retain market share.
For the full story, go to this week’s Food Institute Report.