Online grocery sales to reach $250B by 2025

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Online grocery sales to reach $250B by 2025

By Dan Ochwat - 09/17/2020

A new shopper survey from Mercatus and Incisiv expects sales of groceries online to account for 21.5% of total grocery sales by 2025, an estimate of $250 billion.

Mercatus recently worked with Brick Meets Clicks on a series of monthly e-commerce studies that has shown a dramatic rise in e-commerce grocery sales dating back to March and through last month.

The latest study — “eGrocery’s New Reality: The Pandemic’s Lasting Impact on U.S. Grocery Shopping Behavior” — looks at how the success of e-commerce grocery could expand out over the next five years. The study suggests that the estimated reach of $250 billion would be a 60% increase compared to pre-pandemic estimates.

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Driving some of this expected e-commerce growth, Mercatus and Incisiv learned that 40% of online shoppers surveyed are likely or very likely to continue to buy online, and that 43% of respondents have shopped online in the last 6 months. 

Additionally, 26% of online respondents have shopped online at their preferred grocer, and  62% of respondents are shopping online due to COVID-19 concerns.

It’s a perfect storm for online shopping now and the numbers could continue as the shoppers gain more comfort with the technology. However, the study did also learn that 78% of all shoppers still prefer to visit a brick-and-mortar grocery store either to shop in-store or for curbside pickup, so shoppers still have love for the physical space.

“With close to 60,000 respondents across the U.S., we analyzed more than 48 million data points and found that shoppers are highly satisfied and loyal to their preferred grocery store, but this loyalty does not extend to the online channel,” said Amar Mokha, COO and benchmarking lead, Incisiv. “While the adoption rate of online grocery has increased significantly, grocers need to improve pickup and delivery slot availability, promotion and coupon availability, and product substitutions to improve customer loyalty online."

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In a demographic look the study found that older shoppers are gravitating to online shopping. Groups 45 years and older have made the most dramatic shifts to online shopping with 46% adopting a new method like curbside and 35% ordering groceries online for the first time. 

 “This comprehensive survey proves that COVID-19 has fundamentally changed the way shoppers approach their grocery options — so much so that we now expect to see online sales reach an unprecedented $250 billion by 2025,” said Sylvain Perrier, president and CEO, Mercatus. “The growth of online grocery in 2020 and its predicted long-term impact, coupled with customers’ continued loyalty to brick and mortar, makes it clear that these avenues must complement each other in creating a great customer experience across a grocer’s entire brand. In order to round out the loyalty to online channels, this data makes it clear that brands should make investments in digital functionality, especially regarding product search, discovery and product information.”