Online grocery is a massive, fast-growing market. According to our estimates, the US online grocery marketplace will grow 20% to $24 billion next year and will rank as one of the fastest-growing categories online.
Future growth will be driven by young, affluent and urban households that are looking for value and convenience. Data from our Fall 2019 Local Search Report™, shows that 57% of Millennials and 37% of Gen Z have tried purchasing groceries online. When asked what drives them to buy groceries online, 57% stated it saves them time, followed by 50%, saying it is more convenient than shopping in-store.
Industry leaders are expecting the trend to continue as well. Nilam Ganenthiram, chief business officer of Instacart recently stated, “In the past year, everything changed as every major grocer in North America brought its business online in a significant way. We believe that in the next five years, one in five households will be shopping for their groceries online. We believe that consumer adoption will continue to increase if we exceed their expectations.”
Nilam is correct. Exceeding expectations is critical for this segment. Our data indicates that nearly half of first-time users will continue to use the online channel if they have a positive experience.
So who is positioned to dominate the marketplace and what are consumers buying? Look for answers to these questions and more insights in our upcoming report on the online grocery segment.