Technological innovation has been a boon to the average American consumer, but on the other end of the spectrum, it’s proved to be the bane of aging retailers that struggle to keep pace with the onslaught of change. As certain retailers have fallen by the wayside in the online revolution, supermarket chains have grabbed the digital bull by the horns in an effort to stay relevant and compete against even the largest of e-commerce giants. Top figure shows total U.S. digital grocery sales over the past few years and how quickly they’re growing.
Grocery retailers that offer consumers the choice to purchase online have been reaping the benefits in the past few years. According to eMarketer, since 2013, digital grocery sales have increased at a steady annual rate of 20%. While digital sales accounted for only 3% of U.S. grocery sales last year, FMI/Nielsen estimates the market share will climb to 13% by 2024 as technology improves and consumers become more familiar with the platform. The online success can be attributed to grocers strategically utilizing existing brick-and-mortar locations in tandem with mobile devices and smart technology, as demonstrated in the figure at the bottom.
Despite the great strides made by grocers to adapt to consumer demands, shopping for groceries online has a long way to go before consumers fully adopt it. ESRI says that only 3% of the adult population in Southern California, roughly 450,000 residents, purchased groceries online in the past 30 days. But as more e-commerce giants toss their hats into the grocery ring, and the convenience of buying food online becomes more commonplace, the established supermarket chains that embraced technology early will find themselves glad they jumped in sooner rather than later.
— Analysis by CBRE
