Will click for food: 55% of consumers favor buying groceries online

BY MATT LINDNER Research Analyst

A global Nielsen study shows the greatest potential for online grocers is in developing countries.

A majority of consumers say they are willing to buy groceries online, but only a quarter of them do, according to a just-released study from Nielsen, titled “The Future of Grocery,” which surveyed 30,000 shoppers from 60 countries. Nielsen’s data shows that 55% of consumers surveyed are willing to buy their groceries online, but only 25% of them actually do.

In North America, while the same 55% of consumers say they’re willing to order groceries online for home delivery, only 12% are doing so. A greater disparity exists when it comes to ordering groceries online and picking them up in store: 57% of respondents say they’re willing to do it but only 9% actually are.

Around the world, the younger generation, particularly millennials, is driving the shift in grocery shopping, and those younger consumers are identified in this survey as people ages 21-34. 57% of all respondents in that age range say they’re willing to buy online for home delivery and 30% already do, the highest percentages among any age group.

“Ordering online for home delivery, that’s basically a top demand for global consumers,” says James Russo, senior vice president of global consumer insights at Nielsen. “It’s driven by heavy urbanization.”

Nielsen’s data shows that online grocery shopping is increasingly popular in Asia, particularly in China, where 46% of respondents surveyed buy groceries online.

Russo says the greatest potential for the online grocery industry moving forward lies in developing nations in Asia, Africa, the Middle East, and Latin America, where the highest percentage of respondents expressed a willingness to buy groceries online. In the United States and Canada, Nielsen data suggests consumers are more inclined to research online, but still want to buy groceries in stores.

“(North Americans) are using digital really more for search, more for research, not ultimately in terms of purchasing items,” Russo says. “That’s the unique aspect of the developing countries online, where they’re doing search, they’re engaging online, but they’re also purchasing.”

Several U.S. grocery chains have made moves to encourage those shoppers open to buying online to give it a try. Meijer Inc., No. 335 in the Internet Retailer 2015 Top 500 Guide, plans to pilot a curbside pickup program  that will enable consumers to shop and pay for groceries online and then pick them up at the store. The service will be free during the pilot, but Meijer says it eventually plans to charge a $5 fee.

Hy-Vee Inc., which has more than 200 grocery stores throughout the Midwest, recently rolled out its Hy-Vee Aisles program, which gives consumers the option to pick up their order or have their groceries delivered, charging $4.95 for delivery and $2.95 for pickup on orders under $100.

Russo says the grocery industry has been late to the e-commerce game, but ultimately those retailers will adapt to where the money is. “The driver of this change is not going to be the retailers themselves, the drivers are going to be the consumers that are demanding this enhancement, driven by millennials,” Russo says.