While instore purchases will continue to account for most grocery sales over the next half-decade, a new report says online sales are poised to grow much faster than expected as leading retailers continue to prioritize ecommerce.
The expansion of online assortment and fulfillment options will be the catalyst for growth, according to a report from Boston-based Edge by Ascential.
The reports reveals that the $2.8 trillion global grocery sector is projected to experience an online CAGR of 13% through 2024 — increasing total online sales to $162 billion by the end of the forecast period.
"We're going to see a major shift to online and omnichannel over the next few years with edible grocery," says Violetta Volovich, associate analyst and report author for Edge by Ascential. "The barriers to adoption and growth in this sector are coming down, and retailers are investing heavily in technology, supply chain and partnerships that will make for an easy, seamless customer experience."
Amazon and Walmart will continue to go head-to-head in the race for global leadership, the report says. Amazon will grow its online food sales from $8 billion to $15 billion by 2024, while Walmart should increase its share of the market from $6 billion to $14 billion.
While ecommerce continues to be the fastest-growing channel, the online shift of edible grocery (comprising food and beverage) has been relatively slow when compared to other categories. Approximately 3% of modern edible grocery sales currently are online, whereas the cross-category average within the global chain retail universe is about 20%, with some ecommerce-driven categories, such as electronics, approaching 50% in total online sales.
But grocers are investing in rapid digital transformation, according to the report, as more than 82% of global online grocery sales are projected to come from omnichannel retail formats by 2024. About 15% will come via Pureplay, and 3% via 3P Marketplaces.
New online-to-offline strategies that facilitate the flow of products and services include leveraging store networks for click-and-collect capabilities and introducing more in-store automation to provide consumers with a more frictionless shopping experience.