Merchant Innovation

US Online Grocery Market Lagging Globally

Although online grocery shopping is growing globally, a new report from dunnhumby reveals that the U.S. lags France, South Korea and the U.K.

Globally, growth has been strong in multi-channel grocery shopping. According to the report, emerging and “nascent” markets saw usage grow by 97 percent and 89 percent, respectively, while developed markets grew by 30 percent year over year. Most of that growth has been concentrated in goods like frozen meat, baby food, and baby care products, which on average grew by 21 percent, suggesting that households with newborn kids are a key demographic for online grocery shopping.

“Across the globe, there’s a marked increase in multichannel grocery shopping, particularly among time and sleep starved parents who benefit most from being able to shop any time, without leaving home,” Julian Highley, global director of customer knowledge at dunnhumby, said in a company news release.

Yet, despite the growth in multi-channel accessibility, Americans haven’t been as accepting of the new shopping model, which has become more established in Europe and Asia. While 26 percent of Americans say household items are important grocery items, only 8 percent say they would buy the items if they were seen online first, compared to 36 percent of Chinese consumers. In the U.S., physical retail is still important for certain transactions.

“While there is strong multichannel growth throughout the world, there are particular challenges in the U.S. preventing the market from reaching the same level of development as elsewhere,” Highley said.

The report also notes how online performance for stores is generally tied to how the audience matches up to the items offered, which the survey interprets as a young, affluent clientele with young children, which makes selling baby items an “important gateway” for online shoppers. Last year saw the debut of Amazon Elements, a grocery service for Prime members that notably included a temporarily suspended recurring diaper delivery service that received mixed reviews. It was believed that this service would be the introduction to Amazon as an everyday grocery sales destination. Other developments that might appeal to smaller cities, according to dunnhumby, include “click and connect” services as the dominant method for online shopping, which has been released by Peapod as well as select retailers like Wal-Mart for deliveries.

The research was done based on the behaviors of 7 million shoppers across Europe, Asia and the Americas.

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