$100 Billion in Online Grocery Sales by 2025 Raises Competitive and Logistics Questions
Each month it seems we get more data points that confirm the accelerating shift toward digital shopping. As we noted in a recent post, non-store sales accounted for 19 percent of holiday shopping in 2016 vs. 17% in 2015, but the shift is moving way past holiday shopping. Amazon is moving into fashion, groceries and other verticals as it continues to collapse its time to customer. We’ve seen continued strength in what Nike and Under Armour call Direct to Consumer, and we suspect Kroger and Whole Foods are likely to see the way the tailwinds in grocery are blowing.
One of the lingering questions is how will all of these goods get to those who ordered them? United Parcel Service? FedEx? The US Post Office? Uber? Lyft or proprietary delivery services? Drones? Odds are there will be a partnering strategy as we doubt each retailer will want to develop their own national hub and spoke consumer facing logistics system.
While online sales make up a small fraction of the total market in the U.S., the market share is growing quickly. A new study from the Food Marketing Institute and Nielsen projects online grocery sales in the U.S. could grow tremendously in the next decade.By 2025, the report suggests that American consumers could be spending upwards of $100 billion on online grocery purchases, comprising some 20 percent of the total market share.
