Report: Still room for brick-and-mortar grocers

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NPD says traditional supermarkets should promote the consumer needs they meet that online rivals aren't matching.

Report: Still room for brick-and-mortar grocers
PORT WASHINGTON, N.Y. — Grocery e-commerce has growth potential, as just 7% of Americans shopped online for groceries in the last month, The NPD Group said in a June 20 press release.

The market research firm cited barriers to adoption of online grocery shopping, the most significant of which is the desire by many consumers to pick out their own fresh items. Other barriers include the fact that many consumers enjoy grocery shopping in a brick-and-mortar store, in part because entering the store can remind them of items they need. And shoppers like to see what’s new, NPD said. Other barriers include the delivery or membership fees that add to the cost of buying online, and the need to schedule and wait for the order to be delivered.

But the convenience of online shopping is expected to propel growth in grocery e-commerce, NPD said. “In fact, 20 million consumers who are current, lapsed or new to online grocery shopping plan to increase their virtual shopping for foods and beverages over the next six months,” according to an NPD study, “The Virtual Grocery Store,” which examines the trends and outlook for grocery e-commerce.

The report asserts that 52% of online grocery shoppers are members of the Amazon Prime membership program that gives subscribers access to free shipping and other Amazon-specific services and deals. Amazon’s proposed acquisition of Whole Foods Market could lead to cost reductions and other game-changing innovations that lower barriers to online grocery shopping, according to NPD. Amazon announced on June 16 it had made a $13.7 billion offer for Whole Foods. The deal needs approval from federal antitrust regulators.

“Brick-and-mortar stores aren’t dead, they will just need to step up their game,” said Darren Seifer, food and beverage industry analyst at NPD. “There will continue to be a large percentage of the population who will prefer to shop at brick-and-mortar grocers. Brick-and- mortar food retailers should market the unique consumer needs they meet that online grocers aren’t currently offering, experience being a key one. At the same time, they need to keep up with the times and leverage digital ordering via their own click-and-collect programs as well as partnering with third parties for delivery in order to expand their offerings.”



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