CARS HOMES JOBS

Online grocery sales ramping up

Thursday, January 30, 2014
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I hate to grocery shop — I mean really hate it. A weekly trip to the supermarket is, to me, a chore.

But I don’t yet see myself turning to the Internet and shopping online.

You’d think I’d be an ideal candidate: 50 percent of respondents in a survey who said they’d bought groceries online over the past month said they took that route to save time; 41 percent said online shopping also saved them money.

And the bulk of respondents — 61 percent — said they went online to get products they couldn’t find at the store.

Check, check and check on my list of peeves about in-store shopping.

The survey, which involved more than 22,000 shoppers nationwide, was conducted by Brick Meets Click, a suburban Chicago firm focused on how our increasingly digital life is impacting retailers. The group’s founder is Bill Bishop, who decades earlier started retail consultant Willard Bishop, where he still serves as chairman.

Bishop was part of a webinar presented last week by The Food Institute on the Internet’s effect on the grocery industry. Already, predictions abound that while online sales will remain a small segment of the overall $1 trillion U.S. grocery sector, they will ramp up quickly to nearly $50 billion by the end of the decade.

Right now, Bishop said, about 3 percent of grocery shopping is done online, and much of that is at “pure play” retailers such as Amazon. But with the online behemoth testing the rollout of same-day or next-day delivery of perishables like vegetables and meat, it could prove a formidable competitor to bricks-and-mortar grocers, whom Bishop said have been “slower to respond” to consumer interest in online shopping.

Supermarkets that want to reach online shoppers can’t just go willy-nilly into it, though. Bishop said the consumers most likely to be shopping online for groceries use the Internet for other purchases, and expect their grocery experience to be as good as any other they’ve had online. They dislike hidden fees and want a wide assortment, he said.

One decision grocers need to make before going online is whether they’ll offer pick-up or delivery of orders, or both. Pick-up-only is “certainly a good start,” Bishop told me by email later. Locally, we saw Price Chopper and ShopRite jump in with both feet when each launched online ordering with pick-up and delivery in 2011.

Grocers in smaller markets like the Albany-Schenectady-Troy metro aren’t likely to face a challenge from AmazonFresh, Bishop said, which currently is targeting major markets like Los Angeles, San Francisco and Seattle. But secondary and tertiary markets will be vulnerable to Walmart expanding its online grocery service, he said, and to smaller, specialized online retailers “that are popping up around the country.”

Bishop foresees online grocery shopping as having “a transformational impact on food retailing” that could result in some casualties among both large and small supermarket chains.

“It’s a serious game of musical chairs,” he told me.

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at marlenejkennedy@gmail.com.

 
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