Tech-savvy generations like Millennials and Gen Z constitute important target markets for e-grocery retailers. Specifically, 45 percent of Millennials and 44 percent of Gen Z shoppers in the United States reported only or primarily shopping for groceries online in 2019. In contrast, older generations have been more reluctant to accustom themselves to online grocery shopping, and only 18 percent of Baby Boomers reportedly shop for groceries online.
However, with the onset of the coronavirus pandemic in 2020, there was an unprecedented opportunity for online grocery retail to accelerate its market penetration. As of May 2020, there was a 202 percent increase in online grocery delivery web searches in the wake of the COVID-19 outbreak. In a survey conducted in April 2020, 38 percent of shoppers with a high level of concern regarding COVID-19 opted for online grocery shopping. Consequently, grocery retailers had to adjust to a surge in demand for online grocery delivery. In fact, sales of grocery delivery and pickup in the U.S. surged from 1.2 billion U.S. dollars in August 2019 to 7.2 billion U.S. in June 2020.
Despite the significant impact of the COVID-19 pandemic on the online grocery delivery market in the United States, the vast majority of grocery shopping still takes place in traditional brick-and-mortar grocery stores. Inconvenient delivery times and high delivery costs continue to be significant hurdles delaying wider consumer adoption of online grocery shopping in the United States.