Among all the online food and beverage retailers, the e-commerce giant Amazon had the highest market share in 2016, followed by Walmart and Kroger. In recent years, Amazon has introduced Amazon Fresh and Prime Pantry, two online grocery shopping services. Amazon’s food and beverage sales are projected to rise from approximately six billion dollars in 2015 to over 23 billion dollars in 2021.
For time-strapped consumers online grocery shopping is a convenient and time-saving option. In a 2016 survey, approximately 72 percent of consumers who had tried online grocery shopping rated their experience positively. However, only nine percent of consumers placed an online order for groceries at least once or twice a month in the United States in 2017. Shoppers often like to see and touch products before purchasing them, or simply enjoy the experience of shopping in stores, factors which are both obstacles for the online grocery shopping industry. Lower prices and convenience are both major factors that would persuade more consumers to give online grocery shopping a try.
The emerging Generation Y, or so called Millennials, is known as a heavy internet user generation. They are characterized as open-minded customers when it comes to in-store apps or the usage of online grocery services. Keeping that in mind, it is not surprising that Millennial shoppers were the most likely to use online channels for grocery shopping in 2017.