Marketing Insights

How Online Grocery Shopping Has Exploded In Popularity

While online grocery shopping was predicted to gradually increase, the onset of a global pandemic created a catalyst for habit change.

For many, the pandemic meant the end of days wandering grocery aisles, searching for ingredients, and the beginning of online grocery shopping. From Amazon and Wholefoods, to nearly every regional grocery store chain, online grocery shopping options with curbside pickup and delivery have exploded in popularity. In 2020, online grocery sales grew by 53%, with predictions for continued growth in coming years. 

While online grocery shopping was predicted to gradually increase, the onset of a global pandemic created a catalyst for habit change. Consumers were eating out less, leading to more grocery purchases. With concerns for safety and convenience, more and more shoppers turned to online options. 

In response, stores have started using powerful AI to predict shoppers’ needs and increase the convenience of online shopping. Grocery store parking lots, once reserved for in-person shoppers, now have dedicated delivery pick-up space. According to one study, 43% of Americans surveyed said they tried curbside pickup for the first time in 2020. 

Improved Customer Experience

Instacart, Kroger, Target, Walmart, and Amazon are just a few of the major retailers that have responded to the increased demand for online grocery shopping. The goal was to provide speed and convenience to customers with express delivery options, expanded online selections, and more delivery windows. 

The result was increased adoption and continued growth. Once thought to be cumbersome, online grocery shopping adoption grew throughout 2020, with curbside pickup increasing from just 7% of respondents in February 2020, to 22% by June.

Continued Growth

With more countries opening up, and the possibility of life returning to “normal”, online grocery shopping is a new staple. Research suggests that online grocery sales will make up 21.5% of the total US grocery sales by 2025. This represents an increase of 600% since 2019. 

The convenience and value of curbside pickup allows consumers to save time and get exactly what they want. Grocery shopping apps allow shoppers to remember previous purchases and quickly stock up on needed items. There are also integrations for coupons and promotions, making the shopping experience significantly easier and more efficient. 

While life is returning to normal, online ordering is here to stay. Consumer trends also indicate increased purchases of shelf-stable items and comfort foods, in case of another emergency. 

In addition to increased online shopping, shoppers are spending more on total grocery purchases. This might be because they are eating at home more, because they want to try new recipes or baking projects, or simply are stocking up in case of future shortages.

In March 2020, the average spending for an American household on groceries was $525. That is up 30% from March of 2019. Even as the pandemic progressed, grocery spending remained about 10% higher than the previous year. 

Improved Sustainability

An area that has also seen more than double its sales in 2020 is local farms and produce delivery services. With the advantage of a short supply chain, small produce delivery services were better able to adapt to the increased demand for grocery delivery during the pandemic. These organic suppliers also benefited from the increased awareness around food quality for good health and a desire to improve sustainability. 

Large grocery suppliers, from Walmart and Target to local chains, are looking to replicate their model, by purchasing more local produce from small farmers for a shorter supply chain and greater flexibility to adapt to changing consumer demands. 

While delivery services are not typically the most environmentally friendly model, the possibility of delivery by bike or electric vehicle can further reduce carbon footprint and build customer loyalty. 

Future Trends

Market research on both new and existing customers indicates that online shopping will experience continued growth. Research from Aki Technologies showed that 68% of new online grocery shoppers would continue to shop online in the future. 

It is in the hands of retailers to provide a customer-centric experience and improved interface to build on the growth to date and consolidate a new standard of grocery shopping. The benefits for retailers include greater purchase frequency, increased spending amount, and greater customer loyalty. 

While in traditional grocery shopping a customer will stop at a store that is convenient, with online shopping they will use the store with the offerings they want and the most intuitive user interface. Building a wide product selection, greater delivery options, a streamlined app and payment system will allow grocery stores of all sizes to capitalize on the increased popularity of grocery shopping online and accelerate growth. 


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