Daily Dose of iQ: Business Insider Projects E-Commerce Growth in Grocery Market

Feb 06, 2015 — Allan Pulga

The majority of us still buy our groceries in person and that's not about to change anytime soon. That said, a new report from Business Intelligence points to reasons why e-commerce has potential to change how some customers buy their food.

A major development in this market, of course, is the expansion of same-day delivery services like Google Express and Amazon Fresh.

BI Intelligence predicts that, from 2013 to 2018, "online grocery sales will grow at a compound annual growth rate (CAGR) of 21.1%, reaching nearly $18 billion by the end of the forecast period. For comparison, offline grocery sales will rise by 3.1% annually during the same period." (See the above graph.)

For online grocery shopping to take off, vendors must overcome obstacles related to cost, logistics, shipping, quality and freshness.

Key findings in the report include:

  • Online grocers must overcome challenges such as the cost and complexity of logistics, shipping fees and speed, and product quality and freshness.
  • Big draws for future online grocery buyers are convenience and a broader selection of products. "Only 15% of U.S. adults have purchased general food items online, but 25% said they have bought specialty food and beverages online, which are hard to find elsewhere," BI Intelligence writes.
  • Niche startups specializing in services like concierge shopping and subscription prepared meals will innovate on the online grocery model.
  • Major e-tailers like Amazon, eBay and Google continue to ramp up their same-day delivery services.

Topics: Retail Operations, Wireless Trends, Mobile Industry, e-Commerce

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