Making online grocery a winning proposition PDF

The global pandemic brought online platforms to center stage for
grocers. Retailers should consider ve trends and take ve steps to
ensure this shift is sustainable and pro table.
P rior to the COVID 19 pandemic, the US grocery sector was lagging other retail
sectors in e-commerce adoption. Customer reservations about buying fresh food
online, along with high e-commerce fees and nonintuitive website designs, stunted
adoption. The grocery sector’s penetration was 3 to 4 percent and signi cantly trailed
sectors such as beauty, apparel, and electronics, all of which had penetration rates of 10 to
20 percent or more.
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Making online grocery a winningMaking online grocery a winning
propositionpropositionJuly 2, 2021July 2, 2021 | Article| Article
By Bill Aull , Steven Begley, Vishwa Chandra, and Varun Mathur

But the pandemic changed that trajectory. During the peak of the pandemic, grocers
watched 20 to 30 percent of their business shift to online, driven by a sudden surge in
demand for contactless shopping. By the end of 2020, online penetration in grocery had
settled at 9 to 12 percent—a threefold increase from prepandemic levels and in line with
mature markets such as France and the United Kingdom. This disruptive shift happened at
breakneck speed; in a matter of months, the grocery e-commerce landscape in North
America accelerated by three to ve years. The e-grocery penetration in the US market is
projected to get to 14 to 18 percent, or more, in the next three to ve years. Here’s what we
see as the new bellwethers for the next few years.
Five consumer trends shaping grocery e-
commerce
Consumer preferences have changed across the board—from how and what consumers
buy to their expectations for customer experience and pricing.
1. Increased online shopping is here tostay.
Despite recent increases in brick-and-mortar tra c as consumers start reverting to their
shopping norms, nearly 50 percent of consumers we surveyed indicated that they buy
groceries online at least once a week, representing a “next normal” (Exhibit 1). Most
consumers are using e-commerce as a way to stock up or top o their weekly and monthly
grocery needs, in addition to visiting a physical store. More than half of these consumers
spend more than $100 per online-grocery transaction.

Exhibit 1
Consumer preferences have changed across the board—from how and what
consumers buy to their expectations for customer experience and pricing.