“Rapid adoption of grocery ecommerce amid the pandemic required retailers to move quickly in an evolving digital landscape. Consumers are continuing to adapt to life amid COVID-19, as convenience and value overtake pandemic concerns as drivers for online shopping. In the years ahead, ecommerce will grow to comprise a higher share of the total market, and retailers have an opportunity to re-invent online platforms to deliver personalized and enjoyable digital shopping experiences.”
– Brittany Steiger, Senior Analyst – Retail & eCommerce

This Report looks at the following areas:

  • The impact of COVID-19, inflation, supply chain constraints and other market factors on consumer behavior and the online grocery market
  • Where consumers shop and what they look for in their primary online grocer
  • Motivators and barriers to shopping online for groceries
  • Consumers’ online grocery shopping behaviors and preferences
  • The evolution of omnichannel shopping

Table of Contents

  1. Overview

    • What you need to know
      • This Report looks at the following areas
        • Definition
          • Market context
          • Executive Summary

              • Top takeaways
                • Market overview
                  • Figure 1: Total US sales and fan chart forecast of online groceries*, at current prices, 2016-26
                  • Figure 2: Category outlook, 2022-27
                • Opportunities and challenges
                  • Reinvent store pickup to take advantage of the BOPIS boom
                    • Enhancing the shopper journey with personalization
                      • Focus on fresh
                        • Invest in technology that supports last-mile fulfillment
                          • Impact of inflation and supply shortages on online grocery
                            • Key consumer insights
                              • eCommerce remains elevated, but the store is still the preferred grocery channel
                                • Consumers who try ecommerce are satisfied and sticking with it
                                  • Consumers shop online to save time – replacing pandemic factors as the top driver
                                    • Lack of consumer confidence in fresh foods and substitutions a major barrier
                                      • Online shoppers like shopping list features, to the detriment of impulse shopping
                                      • Market Size and Forecast

                                        • Upward trajectory of ecommerce expected to reach 20% of total market within five years
                                          • Figure 3: Total US sales and fan chart forecast of online groceries*, at current prices, 2016-26
                                          • Figure 4: Total US sales and forecast of groceries*, at current prices, 2016-26
                                      • Segment Performance

                                        • Health and beauty still comprise the majority share of ecommerce, but food and beverages continue to grow
                                          • Figure 5: total us online sales of groceries*, by segment, at current prices, 2016-21
                                          • Figure 6: Total US online sales of groceries*, by segment, at current prices, 2019 and 2021
                                      • Market Factors

                                        • Shifts in the pandemic have an impact on consumer behavior
                                          • Inflation and rising costs will shift the online grocery landscape
                                            • Figure 7: 12-month percentage change, Consumer Price Index – All items versus food at home items, 2021- 22
                                            • Figure 8: US gasoline and diesel retail prices, 2001-22
                                          • Technological innovation carves out new possibilities for online grocers
                                            • Government leaders crack down on rapid delivery and dark stores
                                              • Impact of climate change on grocery ecommerce
                                                • Figure 9: Town & Country Markets all-electric delivery fleet, 2022
                                            • Competitive Strategies and Market Opportunities

                                              • Competitive strategies
                                                • Kroger leverages Ocado partnership to revolutionize digital expansion strategies
                                                  • Figure 10: Kroger + Ocado announce plans for US expansion, 2022
                                                • Grocers lean into BOPIS solutions to keep convenience coming
                                                  • Figure 11: Opie Drive-Thru Grocery; Fresh Street pickup-only grocery, 2021 and 2022
                                                • Instacart pivots to expand service offerings for retailers
                                                  • Figure 12: Instacart unveils platform suite for grocers, 2022
                                                • Walmart exerts its dominance in the online grocery channel
                                                  • Figure 13: Walmart promotes delivery services to consumers and third-party partners, 2021 and 2022
                                                • H-E-B and Albertsons leverage livestream shopping
                                                  • Figure 14: H-E-B virtual cooking classes, seasonal soups, 2022
                                                • Market Opportunities
                                                  • Enable smarter substitutions and personalized shopping through AI and machine learning capabilities
                                                    • BOPIS is a buoy to online grocery channel
                                                      • Strengthen service offerings through online personal shoppers
                                                        • Acquire third-party rapid delivery firms to emphasize speed
                                                          • Expand center aisle and general merchandise appeal via ecommerce channels
                                                            • Figure 15: Giant Foods + Ship2 Me partnership, 2022
                                                        • The Online Grocery Consumer: Fast Facts

                                                          • Grocery Shopping Overview

                                                            • Who shops for groceries
                                                              • Nearly all adults shop for groceries; many share the responsibility
                                                                • Figure 16: Grocery shopping responsibility, by gender and age, 2022
                                                              • How often they shop
                                                                • Shopping frequency is increasing as consumers shop in new ways and across multiple channels
                                                                  • Figure 17: Shopping frequency, by generation, 2022
                                                                  • Figure 18: Shopping frequency by consumer shopping method, 2022
                                                                • Parents are frequent grocery shoppers
                                                                  • Shopping method
                                                                    • Online and multichannel shopping remains elevated, but in-store sees a rebound
                                                                      • Figure 19: Shopping methods, 2022
                                                                      • Figure 20: Select Shopping Methods, year over year, 2022
                                                                    • Millennials are driving multichannel shopping; older consumers stick to in-store
                                                                      • Figure 21: Shopping Method, by generation, 2022
                                                                    • Consumers shop online for larger stock-up trips
                                                                      • Figure 22: Preferred shopping method by trip type, 2022
                                                                      • Figure 23: Preferred shopping method by trip type, by generation, 2022
                                                                  • Continued Impact of Covid-19 on Online Grocery Shopping

                                                                    • Online shopping remains elevated as pandemic behaviors persist
                                                                      • Figure 24: Impact of COVID-19 on grocery shopping, 2022
                                                                    • Who’s shopping more online
                                                                      • Figure 25: Selected Impact of COVID-19 on grocery shopping, by gender, age and parental status, 2022
                                                                      • Figure 26: Target adds Starbucks pickup to its “Drive Up” service, 2022
                                                                  • Interest in Future Online Grocery Shopping

                                                                    • Interest in online shopping continues to grow, but some holdouts remain
                                                                      • Figure 27: Interest in future online shopping among in-store shoppers, 2022
                                                                      • Figure 28: Interest in future online shopping among in-store shoppers – NETS, 2022
                                                                      • Figure 29: Anticipated amount of online shopping among online shoppers, 2022
                                                                      • Figure 30: Anticipated amount of online shopping among online shoppers, by generation, 2022
                                                                  • Shopping by Category

                                                                    • Consumers still shop in-store for most categories, but online shopping habits hold
                                                                      • Figure 31: Shopping for major categories – Online versus in-store, 2022
                                                                    • Non-perishables and beverage most often shopped online; Millennials overindex in all categories
                                                                      • Figure 32: Shopping for major categories – Any online, by generation, 2022
                                                                  • Retailers Shopped Online

                                                                    • Walmart and Amazon go head to head, but Walmart retains its lead
                                                                      • Figure 33: Retailers shopped online, 2022
                                                                      • Figure 34: Giant Foods eliminates pickup fees, 2022
                                                                    • Younger consumers drive mass merchant online grocery dominance; Baby Boomers loyal to supermarkets
                                                                      • Figure 35: Retailers shopped online, by generation, 2022
                                                                  • Usage of Online Shopping Apps and Memberships

                                                                    • Paid memberships dominate; Instacart falls below direct from retailer
                                                                      • Figure 36: Apps and Memberships used for online grocery shopping, by generation, 2022
                                                                      • Figure 37: Kroger highlights fuel points; Walmart+ offers Spotify Premium benefit, 2022
                                                                  • Reasons for Shopping Online

                                                                    • Convenience, especially time saved, drives consumers to shop online
                                                                      • Figure 38: Reasons for online grocery shopping, 2022
                                                                      • Figure 39: Walmart adds “Shop By Diet” feature, 2022
                                                                    • Value to rise in importance amid escalating prices
                                                                      • Figure 40: Select reasons for shopping online – Value, by generation, 2022
                                                                      • Figure 41: Afterpay polls users on Twitter about BNPL for groceries
                                                                    • Younger consumers seek enjoyment when shopping online
                                                                      • Figure 42: Select reasons for shopping online, by generation, 2022
                                                                      • Figure 43: Albertsons + Pinterest shoppable recipes, 2021
                                                                    • In their own words: consumers describe their online shopping preferences
                                                                    • Reasons for not Shopping Online More

                                                                      • Strong preferences for in-store shopping a hold; lack of trust is a factor
                                                                        • Figure 44: Shipt ad campaign highlights personal shoppers, 2021
                                                                        • Figure 45: Reasons for not shopping online more, by generation, 2022
                                                                      • Asian consumers more hesitant than others to shop online
                                                                        • Figure 46: Select reasons for not shopping online more, by race and Hispanic origin, 2022
                                                                        • Figure 47: Umamicart, Asian-focused online grocer, 2021
                                                                        • Figure 48: Weee!, Asian and Hispanic-focused online grocer, 2022
                                                                    • Online Shopping Behaviors

                                                                      • Online shopping supports list-making and price comparison
                                                                        • Figure 49: Online shopping behaviors, 2022
                                                                      • Baby Boomers take a prescriptive approach, younger consumers more likely to shop around
                                                                        • Figure 50: Select online shopping behaviors, by generation, 2022
                                                                        • Figure 51: Instacart adds features to increase value for shoppers, 2021
                                                                      • Consumers look for transparency on product labels
                                                                        • Figure 52: Select online shopping behaviors, product labels, 2022
                                                                        • Figure 53: Research on nutrition labeling in grocery ecommerce; Kroger “Food as Medicine” recognition, 2022
                                                                      • Impulse and add-on purchases a challenge in grocery ecommerce
                                                                        • Figure 54: Select online shopping behaviors, impulse and add-on purchases, 2022
                                                                      • Behaviors of frequent online grocery shoppers
                                                                        • Figure 55: Behaviors of frequent online grocery shoppers, 2022
                                                                    • Attitudes toward Online Grocery Shopping

                                                                      • Convenience is the hook, but opportunities to innovate abound
                                                                        • Figure 56: Attitudes toward convenience, by generation, 2022
                                                                        • Figure 57: Google Cloud launches Retail Search, 2022
                                                                      • Fresh foods present a challenge and an opportunity for ecommerce
                                                                        • Figure 58: Attitudes toward freshness, by generation, 2022
                                                                      • Consumers expect a range of delivery options
                                                                        • Figure 59: Attitudes toward delivery, by generation, 2022
                                                                        • Figure 60: Domino’s pizza rewards customers for picking up orders, 2022
                                                                      • Rapid delivery serves up speed and convenience for those willing to pay for it
                                                                        • Figure 61: Kroger, Publix partner with Instacart on rapid delivery, 2021
                                                                        • Figure 62: Attitudes toward fast delivery, by gender and age, 2022
                                                                      • Online experiential concepts add enjoyment and encourage impulse purchases
                                                                        • Figure 63: Attitudes toward impulse and enjoyment, 2022
                                                                        • Figure 64: Thailand’s Central Retail plans supermarket in the metaverse, 2022
                                                                      • Consumers are interested in ordering fresh, hot prepared meals online
                                                                        • Figure 65: Attitudes toward prepared food delivery, by generation, 2022
                                                                        • Figure 66: Attitudes toward prepared food delivery, by race and Hispanic origin, 2022
                                                                      • Parents are a key target market for online grocery shopping
                                                                        • Figure 67: Attitudes toward online grocery shopping, by parental status, 2022
                                                                    • Appendix – Data Sources and Abbreviations

                                                                      • Data sources
                                                                        • Sales data
                                                                          • Forecast
                                                                            • Consumer survey data
                                                                              • Consumer qualitative research
                                                                                • Abbreviations and terms
                                                                                  • Abbreviations
                                                                                  • Appendix – The Market

                                                                                      • Figure 68: Total US online sales and forecast of groceries*, at inflation-adjusted prices, 2016-26
                                                                                      • Figure 69: Total US online sales of food and beverages*, at inflation-adjusted prices, 2016-21
                                                                                      • Figure 70: Total US online sales of health and beauty products, at inflation-adjusted prices, 2016-21
                                                                                  • Appendix – The Consumer

                                                                                      • Figure 71: Interest in Future online shopping among in-store shoppers, by generation, 2022
                                                                                      • Figure 72: Reasons for online grocery shopping, by generation, 2022

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