The mundane task of heading to the grocery store each week has gone high-tech with some big-name companies joining the growing trend of online grocery shopping. Not only are local grocers giving their customers another way to shop with them, but also heavy-hitters like Amazon and Google are joining in and taking this budding e-Commerce segment to the next level.
Our friends at thestreet.com say Amazon has launched Prime Now as a way for the buying public to get non-perishables delivered within the hour, and AmazonFresh, which delivers fresh grocery and local products within 24 hours. (Note: this service is not yet available nationwide.) Google’s service is same day delivery of non-perishable items, but they haven’t ventured into perishables just yet.
There have been a number of grocery delivery companies that have popped up that are dedicated to all of the foodies out there. Companies like Blue Apron offer consumers recipe specific, farm fresh ingredients with perfectly measured spices and other cooking necessities. The recipes offered reflect what’s in-season, and Blue Apron works with a network of local farmers to guarantee freshness and variety. They also allow customers to set a delivery time that best fits their needs.
With so many players getting involved, is there a big enough piece of the pie to make this a profitable venture? According to ibisworld.com, this segment accounted for $11 billion dollars and grew 14.1 percent from 2009-2014. The growth may steadily increase, as those who have grown up in an all-digital world become a bigger part of the buying community. In fact, 30 percent of millennials (age 21-34) and 28 percent of Generation Z (ages 15-20) say they order their groceries online. Factor in that only 17 percent of baby boomers (ages 50-64) order groceries online, you can see that this segment is poised to continue to grow.
According to a recent survey, 54 percent of the 1,100 surveyed said they increased their online grocery shopping over the previous year by an average of 29 percent. In that same survey, 23 percent said they don’t buy fresh products (i.e. meat, fish, dairy, produce) online. Sadly, 57 percent said they have been disappointed by the quality and freshness of at least one purchase in the previous year.
The question of freshness is the main drawback of people truly embracing this as a viable way to do 100 percent of their grocery shopping. More than half of those surveyed said they would be more comfortable if the fresh products were sourced from a local farm. This gives the local grocer a slight upper hand compared to the big consumer sites because they know how to handle fresh, frozen and breakable items. They can also partner with local farmers and customize their delivery times when taking orders.
This shift in shopping attitude doesn’t mean grocery stores will disappear. Looking at the numbers, you can see there are 70 percent of millennials and 72 percent of Generation Zer’s that shop off-line for their groceries, and 83 percent of baby boomers still walk through the doors to do their shopping.
Online grocers are making huge strides and Humboldt Merchant Services doesn’t shy away from emerging e-Commerce markets. If you’re expanding your business into the exciting world of online groceries, contact Humboldt for your payment processing needs.