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Americans quickly embraced the idea of shopping online for most things. First books launched Amazon, and then inexpensive MP3s launched Apple’s iPod. The hardest in-store shopping habit to give up has been groceries. That is changing now, thanks to people avoiding grocery stores to keep away from COVID-19. Teresa Rivas writes in Barron’s:
Americans can be very picky about their avocados.
That was one of the reasons often cited by experts to explain why people were happy to buy almost everything except groceries online. E-commerce penetration of the food and beverage sector, which includes supermarkets and packaged food companies, was about 2.5% in 2019 according to data from Global X. When Covid-19 arrived and people worried more about the pandemic than the state of their produce, digital orders jumped.
Online sales are projected to climb to 4% of the sector this year, up nearly 60% year over year, making it one of the fastest-growing segments of e-commerce and one with plenty of runway for more gains. And there’s good reason to think that the trend is here to stay.
“People are learning that you can get pretty much everything you want with a 99% satisfaction rate,” says Pedro Palandrani, research analyst at exchange-traded fund provider Global X. “Grocery delivery has proven to be quiet efficient, and mistakes are very minimal.”
As of May, just under half of grocery shoppers made their purchases online, with 43% doing so for the first time, according to data from the Food Industry Association. As Barron’s has noted before, the convenience of ordering online, as well as the formation of new shopping habits, could lead to permanent shifts in consumer behavior, especially for food retail.
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