We are heading for a tipping point. In the next few years, the way most of us shop for groceries will change dramatically. Online grocery shopping combined with some form of curbside pickup or home delivery will become more widely adopted – perhaps the norm. Much of it will become automated. NOTE: We are going to avoid the ‘internet of things’ discussion right now because it is too esoteric. Sure, it’s related, but it is still too pie in the sky.
Online grocery shopping is trending up in a big way. It is expected to be a $17.2-billion industry by 2019. According to Nielson, a mere 10% of people have shopped online for groceries and picked-up curbside or had it delivered – yet 55% plan to try home delivery or curbside pickup in the future.
The Driving forces:
First – economics! More millennial shoppers combined with declining unemployment translate to greater disposable income for tech-savvy people already comfortable shopping online in other categories. Additionally, there is an able workforce of retiring boomers and teens-to-young-adults ready to perform shopping and delivery services. The financial rationale is there.
Second – A fast-paced culture. We are over-scheduled, busy, and media-saturated. Leisure time is pinched for working families and young professionals alike. People place a premium on their free time and paying a little more for delivered groceries makes a lot of sense because it can free up a few hours on the calendar. Why would I wander around a store and stand in a checkout line if I don’t have to? This creates the emotional motivation to consider a change in behavior.
Third – Technology. For the retailer, inventory data is already stored in some system – it just needs to be connected to an online shopping cart solution. On the flip side, consumers now expect immediate gratification and get it through their smartphone, tablet, or computer. All the tech components are in place.
So, in a nutshell, you’ve got optimal conditions of supply and demand with technology as solution to improve people’s lives. Boom!
Just about everyone is seeing the potential here. Existing brick-and-mortar grocery stores are testing different models. Digital powerhouses like Google and Amazon are getting into the game. Heck – Amazon has multiple models with Fresh, Prime Pantry, and Dash – with its cool button. Then, there are pure online grocers such as Peadpod and Fresh Direct serving key markets. And finally, a range of hungry start-ups are shaking up the world of grocery shopping. Fittingly, Forbes recently named Instacart America’s most promising company.
To be clear, the world of online grocery shopping is still in its infancy in the United States. But market forces, emerging technologies, and power players are ingesting heavily. The recent Walmart vs. Amazon Prime battle is a precursor in the race for market dominance in this space. The barriers of past – cost, fulfillment, and delivery – are breaking down and as consumers understand the convenience of online grocery, you can expect a groundswell in adoption.
As a marketer who helps a lot of CPG brands – I want to understand what this might mean for manufacturers. I feel the best way to do that is to experience some these solutions for myself. So, I am going to roll up my sleeves and jump into the world of online grocery shopping. As a husband and dad of three who does the food shopping for a very busy family – I am going to test a few platforms. I will simply order some food and household items for my family. I am going to look at each platform through a few different lenses (1) user experience, (2) consumer value, and (3) opportunities for CPG brands.
So, this is the set up for a multi-blog-post-series. I will work through the process of ordering groceries online from several providers and have them delivered or pick them up curbside.