Online Grocery Sales on the Rise

Since the early days of the Internet, companies have tried to capitalize on online shopping. Some have failed, some have held their own. Nielsen, a leading global research and measurement firm, has recently suggested that annual online grocery sales will double to $25 billion by 2014. Currently, online grocery sales are around $12 billion which is up from about $5 billion in 2006.

Nielsen attributes the growth to the increasing number of the Generation Y, who grew up with and are comfortable with technology. Regardless of the comfort that young people have with the latest technology, Nielsen still believes it will take time for consumers to get used to shopping at online grocery stores. This suggests that online grocery shopping has significantly more potential than $25 billion per year possibly turning into a $100 billion plus industry in a decade or more. Some other key factors contributing to the increase are:

1. Convenience - the growing need for convenience has already transformed the grocery industry
2. Increase in Mobile Applications - 63.2 million of Americans have Smart phone, making online grocery shopping easier and quicker
3. Customization - Digital platform allows online grocers to personalize the shopping experience

The bottom line is that online grocery represents a largely unrealized opportunity, but grocers must work to build awareness and establish the value proposition. The process needs to be easy and convenient, and online grocers must educate shoppers about the benefits in simple terms: buying groceries online saves time and money—two considerations that every shopper is looking for.