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Study: Number of online grocery shoppers surges

Amazon remains top retail destination, but Walmart closes gap

The share of U.S. consumers who purchased groceries online in the past year has jumped from less than a quarter to well over a third, with Amazon and Walmart by far the top purchasing venues, according to Coresight Research.

In its U.S. Online Grocery Survey 2019, released Tuesday, Coresight said 36.8% of 1,888 internet-using adults polled bought groceries online in the previous 12 months, up from 23.1% in the 2018 study. Based on U.S. Census Bureau data, the 2019 percentage equates to approximately 93 million online grocery purchasers, a gain of nearly 35 million from last year.

“This year, some 39.5% said they expect to shop online for groceries in the next 12 months, representing only a minor uplift from actual shopper numbers (past 12 months),” Coresight founder and CEO Deborah Weinswig wrote in the report. “The potential to grow the online market lies in the 21% who say they don’t know if they will buy groceries online in the next year.”

Where in-store grocery shoppers have bought groceries in-store vs. where online grocery shoppers have bought groceries online, past 12 months (% of respondents)

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Online grocery spending growth, however, hasn’t matched the sharp expansion in the shopper base, Coresight noted. Of U.S. food and beverage retail sales in 2019, the research form forecasts just 2.7% to be online, up slightly from 2.2% in 2018.

“The online grocery market has a sizable number of shoppers, but they generally buy online infrequently,” Weinswig observed.

Indeed, Coresight’s survey found that 41% of shoppers bought “a small amount” and 31.4% purchased “almost none” of their groceries online in the past year. Just 15.8% said they bought “some” of their groceries online in the previous 12 months, while 6.8% purchased “most” and 5% bought “all or almost all” of their groceries online.

The bottom line: 72.4% of respondents purchased “a little” and only 11.6% bought “a lot” of their groceries online, compared with 71.7% and 14.3%, respectively, in the 2018 survey, Weinswig reported. The study includes food and nonfood items typically purchased from a grocery store.

“The proportion of online shoppers saying they do ‘most’ or ‘all or almost all’ of their grocery shopping online declined year over year in 2019,” she explained. “The biggest year-over-year uplift was in the proportion doing a small amount of their shopping online, suggesting that the market is primarily adding tentative or occasional shoppers.”

On the retail side, Amazon remains the dominant online grocery purchasing destination, but Walmart has narrowed the gap, Coresight’s study showed.

Of those surveyed, 62.5% said they bought groceries online in the past 12 months from Amazon, compared with 59.5% a year ago. Meanwhile, 37.4% reported purchasing groceries online from Walmart during that time span, up from 25.5% in the 2018 study.

Online grocery shoppers at selected retailers: proportion of groceries they bought online (% of respondents)

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Target also had a strong gain, with the percentage of shoppers who bought groceries online from the retailer climbing to 15.7% from 6.9%. The next-largest increases were seen by Amazon-owned Whole Foods Market (to 8.4% from 3.7%), The Kroger Co. (to 11.2% from 8.1%), Aldi (to 4.6% from 1.6%) and Costco Wholesale (to 8.9% from 6.2%).

The online grocery shopper share also grew at Ahold Delhaize USA’s Peapod (to 4.6% from 3.7%), Publix (to 4.5% from 2.8%), Albertsons/Safeway (to 4.3% from 3%), FreshDirect (to 2.9% from 2.5%) and Ahold Delhaize USA’s Hannaford/Food Lion (2.3% from 0.7%).

Based on census data, Walmart and Kroger have more than doubled their online grocery shopper numbers over the past 12 months, adding about 20 million and 6 million online customers, respectively, Coresight said in the report. Target has more than tripled its online grocery shopper count, adding an estimated 10 million customers during the past year.

“We also asked respondents where they bought groceries in-store,” Weinswig wrote. “Of the major retailers, Walmart has the lowest ratio of in-store to online (very roughly 2:1), suggesting that it is converting shoppers to grocery e-commerce faster than its rivals are. Target and Kroger each have an in-store/online ratio of very roughly 3:1.”

Although Amazon is well-ahead of other retailers in drawing online grocery shoppers, the e-tail giant “underindexes” on regular, full-basket grocery purchases, Coresight found. Twenty-six percent of shoppers surveyed said they bought “some,” “most” or “all or almost all” of their groceries online from Amazon, compared with 35.4% for Walmart, 34.9% for Target and 34.6% for Kroger.

“Amazon shoppers appear to be occasional or small-basket online grocery shoppers,” said Weinswig. “Amazon may underindex in grocery because the most popular Amazon service is its regular website, used by around 53% of Amazon’s grocery shoppers. Amazon’s regular site is limited to ambient grocery products that can be sent by mail, which makes it all but impossible to shop for a basket of conventional groceries.

“Apparently offsetting this was a jump in respondents saying they used AmazonFresh, Amazon’s full-service grocery service, from 12% of Amazon grocery shoppers in 2018 to 25% in 2019,” she added.

The share of online shoppers who made grocery purchases via Amazon.com dipped to 52.6% from 54.5% in 2018, while the percentages rose for Amazon’s Subscribe & Save service (to 24% from 21.9%), Prime Pantry (to 29.6% from 29.5%) and Prime Now (to 34.4% from 31.9%). The Prime Now on-demand service also provides delivery and pickup from Whole Foods stores.

“Amazon Prime members show greater propensity than those without Prime membership to buy groceries on Amazon.com, at 68% versus 44%,” Weinswig stated. “Prime members underindex in buying groceries online from Walmart.com, Target.com and Kroger.com, but they are more likely than average to buy groceries online from Amazon-owned Whole Foods Market.”

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