Americans spent a staggering $627 billion on groceries in 2016, according to YouGov, up 86% since 1992. But the industry is doing more than just growing; it has been evolving. New technology platforms are enabling consumers to buy their groceries online from the comfort of their home, and Americans are biting. How? Let's dive deep in our next article.
But, How Many Americans are Buying Groceries Online?
As of 2017, 31% of Americans were likely to buy groceries online. While the segment is small compared to those shopping in brick-and-mortar stores, it is growing fast. In 2012, online grocery sales were around $6 billion, they reached $14.2 billion in 2017, and are predicted to reach $29.7 billion by 2021. And who is doing most of the online grocery shopping? Of all the generations, heavy-internet-using-millennials.
Main Players in U.S. Online Grocery Shopping Market
What companies are blazing the trail in grocery e-commerce? For a while, Amazon’s online grocery shopping services, AmazonFresh and PrimePantry, held the majority of the market share; approximately 18%. Wal-Mart trailed behind in second place with about 9% market share. Companies are taking notice of the growing trend and seizing the opportunity. For example, Wal-Mart Stores, Inc. and the Kroeger Company issued mandates to invest in technology for home delivery services and keeping produce fresh. Further, last year, both Costco and Wal-Mart tested new home delivery programs, with Costco aiming to offer the service in 50 markets by the end of the year.
And, a smaller company, Aldi, made an interesting move by partnering with independent grocery delivery service InstaCart to introduce home deliveries in three markets. However, Amazon isn’t sitting idly letting its competitors attempt to pass it by. It made a big move acquiring Whole Foods last year, which instantly boosted its online grocery sales and further positioned it as a main player in the grocery market.
As online services like AmazonFresh, Walmart, and Instacart continue to become more popular, traditional grocery brands will need to evolve and innovate their e-commerce solutions or will die.
Grocery Store E-commerce Made Easy
What if there was an enterprise e-commerce platform for grocery stores that locations could install and set up in days, and not months? A flexible open source platform that you could choose to host in the cloud or install on your own infrastructure. One that was completely scalable and configurable so you could take on the big guys. The first component is a customer-facing mobile application for shopping. The interface lists all of a store’s available products, organized for easy viewing by customers. Further, it features recipes so customers can do all their meal planning and shopping simultaneously; saving them time and encouraging larger orders.
No more half day marathons at the grocery store. Shop on your time. Add food to the cart by product or recipe and checkout when you're ready. When customers are ready to checkout, they can click the button, choose their delivery date and time, select their payment method, and complete the order. Then, the store receives the order and prepares it accordingly. Customers can track the delivery through the app’s delivery map. It shows where the driver is and, similar to the Uber app, customers can communicate with the driver through a chat interface. None is left waiting without knowing what to expect.
Don't wait around all day for your groceries. Keep an eye on your delivery time and make any list minute changes with your delivery person via chat. Grocery store owners and employees also need to know what’s going on, which is where the administration dashboard comes in. Members of the organization can be authorized to log in and review information such as the location of drivers, reviews from customers, average delivery times, contact numbers, new customers, gross profits, completed orders, and more. Keep tabs on the whole operation, getting the information you need for quality control.
Important store stakeholders can keep track of trends and important KPI's. This app offers a complete out-of-the-box solution, from meal planning to a satisfied customer with groceries at their doorstep.
The Grocery Stores of the Future
As more and more consumers demand online grocery shopping, companies that don’t respond will get left behind like Blockbuster after Netflix and Redbox took off. The level of convenience without much of an increase in price is hard to compete with, especially amidst the busy lifestyles of the American people. And the evolution doesn’t end with online groceries. Various other technologies are emerging. For example, Amazon launched a pilot store this year, AmazonGo, with no check out clerks or counters. You simply grab what you want and go.
How does that work? It’s quite complex, involving a combination of a smartphone app, machine learning, computer-vision algorithms, and hundreds of incognito infrared and regular cameras. When you walk out, your credit card is automatically charged for the items you chose. Kroger is also rolling out new technology this year in 200 of its stores. It will install digital displays where price tags normally hang which can display the price, nutritional information, ads, and more. One of the earliest potential benefits they’ve identified is the ability for smartphones to pair with displays, enabling the display to light up when an item is on your shopping list. This was tested out when preparing online orders, and it drastically cut down the packing time.
Grocery shopping in ten, five, and even as little as three, years is going to be very different than it is today due to technology. A large market is up for grabs. The question is, how will companies respond and which will make it to the other side?
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