Dive Brief:

• Although one in 10 U.S. consumers regularly fills an online shopping cart with groceries, the trend is moving more slowly than e-commerce in other categories, and nearly all online grocery customers still buy food at brick-and-mortar supermarkets, according to a statement on a study from The NPD Group.
• Consumers said they prefer to pick out their own fresh items, and wandering through a grocery store often reminds them of other items they need. They also don’t want to pay delivery fees, and nearly half of those surveyed by The NPD Group say going to the store is faster than ordering their staples online.
• But today’s consumer still wants the benefits of online shopping, including not needing to leave home, easy price comparisons, quick shopping and not having to wait in a checkout line. The NPD Group said grocery shopping could be similar to categories like electronics, where people select items but want to see them in person before committing. Grocers could offer a combination of brick-and-mortar stores and online options with speedy delivery.

Dive Insight:

Grocers seem confident that online shopping is the future. The Food Marketing Institute and Nielsen predict supermarket e-commerce will be a $100 billion business by 2025. More than 40% of millennials purchased at least some groceries online in 2017, a 50% jump from the year before. Consumers enjoy the convenience and cost savings, and as grocers improve their websites and delivery systems, the trend is only likely to grow, industry leaders say.

Still, a 2016 online survey of 2,000 people by Statista shows that grocers might do well to focus online ordering and delivery service to certain store aisles. About half of those surveyed said online shopping makes sense for items that have a long shelf life or are difficult to find. Many also praised e-commerce for items they like to stock up on, things that are easy to ship. Nonetheless, a sizable 22% of respondents said food is not a suitable category for online shopping at all.

Right now, online grocery shopping seems to work best in large cities, where the population is dense, incomes are high, and lots of young people work long hours and are willing to pay a premium to have food delivered to their doorstep, investment expert Richard Kestenbaum writes in Forbes.

In general, Kestenbaum wrote, consumers are hesitant to rely on someone else to choose their produce, nor are they willing to spend money tied to service and delivery. That means grocers, already dealing with razor-thin profit margins, are left covering labor costs consumers don’t want to pay for.

A technology wave is breaking across the industry, driven by Amazon and Walmart's expansion. There are already vision technologies that can look at a head of lettuce, see browning, and organize stock rotation to avoid spoiling, Forbes reported. Coop Italia, the leading grocery chain in Italy, has a flagship "supermarket of the future" with interactive tables that provide more information, vertical shelving, and real-time data visualization.

For now, grocers are probably smart to sell items online for which consumers are willing to pay — which could mean holding off on offering fruits and veggies. They might not have to hold off long — a recent study by Field Agent found that 65% of online shoppers bought fresh produce, and 31% picked it up as an impulse buy.  

Analysts generally agree that click-and-collect will become the dominant alternative way of shopping, and stores are reaping dividends for their investments in this space. Kroger's ClickList is in more than 1,000 stores nationwide, while Walmart is on track to eventually offer click-and-collect at all of its locations. According to the study from Field Agent, establishing these programs can also lure shoppers inside their stores. The study found 59% were very likely to make an in-store trip to complete their shopping.