“We deliver” is the boast of online companies that bring food, or even entire meals, to your home. So could this make your local grocer a thing of the past? Why go to the supermarket when it can come to you? Seattle mom Christine Holm gets groceries from Amazon, from the company’s new super-fast Prime Now service."
“My husband and I both will stay up late to watch TV after the baby’s in bed. And we think what ice cream we can order?” she laughed.
"Her items come to her in just one hour," Anna Werner wrote for CBS News.
“What it really is about is saving your time,” said Stephenie Landry, who heads up Prime Now. “There’s lots of people who don’t want to be in lines.”
7.9% of people, in fact. That's what the most recent AudienceSCAN study found when survey takers were asked if they've had groceries delivered to their homes.
"Landry walked Werner through an Amazon facility (which she called “organized chaos”), where workers take those online orders and fill up brown paper bags for delivery. “We are usually carrying somewhere between 20,000 and 40,000 items,” Landry said. For larger orders, the company also offers Amazon Fresh, an online grocery store with even bigger warehouses."
"And it’s not just Amazon: grocery chains (like Safeway and Whole Foods) and even Google are among at least 50 major outlets offering online delivery. Sales are up 15% from 2015, and could top $12 billion this year."
Local grocers can take advantage of this trend by offering their own delivery services. TV spots and direct mail ads can be effective in reaching Grocery Delivery Users, with 48% and 45%, respectively, taking action. But a daily deal could convince them to try it out for the first time. Grocery Delivery Users are 72% more likely than average consumers to take action after seeing daily deals.
"So with all these new services, profits can’t be far behind, right? Not so fast," says retail analyst Kurt Jetta. He says the proliferation of online grocery services is a sign of what he calls the “Sheep Effect”: “They’re just, ‘Well, they’re doin’ it, they’re doin’ it …’ But, like, just stop and think: Is that right for you?”
"Jetta says online grocery shopping accounts for just 1.5% of the $800 billion grocery market. A key reason is that right now, he says, buying groceries online is work."
A grocer's sweet spot could be the parents of elementary-aged kids. According to the latest AudienceSCAN study, 23.4% of Grocery Delivery Users have children aged 6 to 9.
"For example, trying to buy a can of baked beans online: “At any one time, you’re getting six [on screen]. You can’t really tell the size, you don’t have a frame of reference.” Whereas in your grocery store, Jetta said, “I have it all. I just see it all at once. I’m usually familiar with the layout. I can just go and do it, and on to the next category.”
"Plus, online shopping may save you time, but not money. Prices can be up to 25 percent higher — and Jetta says data shows 90% of consumers still prefer the traditional grocery store."