Online Grocery Shopping: Is the US ready?

online grocery shopping

The world is becoming more digital by day.

Online shopping continues to grow. More recently, that has included online  shopping. Online grocery shopping doesn’t replace traditional in-store shopping, but adds another convenient option for consumers to choose from. Online grocery shopping has taken off in the UK and across Europe. In 2013, online grocery shopping accounted for $4.6 billion in the UK. There are also more than 100 drive-thru grocery stores in the UK, which is now the world leader in the field of online grocery.

So why is the UK having so much success in online grocery?

Geographically speaking, the UK is relatively small, making it easier for distribution centers to seamlessly serve the entire country. As a result, online grocery shopping became very popular very quickly. Since consumers have embraced the concept so quickly, delivery costs can remain low. Lastly, the UK doesn’t have as many retailers as the US. 71 percent of the market is made up of four large retailers. These big guys have the resources to offer online grocery shopping.

Instacart has also generated opportunities in several larger cities. While it’s slowly becoming more and more popular, adoption rates in the US are nowhere near close to online grocery adoption rates in the UK.

There are several reasons for this. The US is significantly larger that the UK. With diverse climates across a vast geographical area, it’s difficult to consistently meet consumer needs that vary greatly. Because the US population is dispersed from coast to coast and north to south, retailers would have to open a high number of distribution centers to service the entire country. This isn’t economically feasible for most companies.

42 percent of the US grocery market is made up of two retailers. The other smaller retailers do not have the staff and resources to successfully offer online shopping. For example, two retailers make up 80 percent of the Australia’s grocery market, while five retailers make up only 38 percent of the Chinese grocery market. Based on these numbers, Australia may be a great candidate for offering online grocery shopping, while China would not.

china online grocery shopping UK online grocery

australia online grocery US online grocery

Source via: The Conversation

With AmazonFresh, Walmart to-go, and delivery companies such as Instacart emerging, the US is slowly growing the online grocery delivery market. The market is expected to change significantly during the next few years, and it will be exciting to see how innovative these companies can be with providing grocery delivery services. There will be plenty of logistical challenges, but more US consumers should be optimistic that they’ll be able to shop for groceries online at a reasonable price.

With Shotfarm’s Product Content Network, retailers in the CPG industry are able to view and upload product data and assets in the format of their choice.