Technavio: Online grocery delivery grows with Web

BY Dan Berthiaume

A rising tide is said to lift all boats, and a new study says rising Internet popularity is lifting online grocery delivery.

According to a new market research report from Technavio, the global online grocery delivery market will undergo a CAGR (compound annual growth rate) of close to 22% for the period 2018-2022. Technavio analysis indicates two main factors, both related to how consumers use the Internet, will drive this strong growth.

First, e-commerce in general continues to produce impressive results. The global B2C e-commerce market generated $2.26 billion in revenue during 2017, including $460.35 billion in the U.S., according to the World Bank Group.

Second, Internet penetration continues to increase. Technavio cites World Bank Group figures indicating the U.S. had nearly 250 million Internet users, 200 million of whom were digital buyers, in 2017. Worldwide Internet penetration reached almost 46% in 2017, providing a potential e-commerce base of close to 4 billion consumers globally.

In addition to broader trends related to the Internet and e-commerce, Technavio also found growing demand for functional foods and beverages to be a key driver of online grocery delivery growth. These grocery products provide health benefits and offer nutritional replenishment for popular health and fitness activities such as yoga and aerobics. A

As these functional foods and beverages are not readily available in brick-and-mortar stores, consumers buy them online. Online grocers and grocery delivery service providers are showcasing and offering these products to widen their product portfolio so as to capture more share in the global online grocery delivery services market.

Other online grocery delivery trends identified by Technavio include rapid growth in mobile commerce and rising popularity of fast delivery services.

Several major U.S. grocery retailers are acting to capitalize on this trend. Target plans to expand the assortment and operating markets that are supported by its same-day grocery delivery service Shipt during 2019. Kroger is offering driverless delivery to all its customers in Scottsdale, Arizona. And Walmart is partnering with Ford Motor Co. and Postmates to test self-driving vehicles to deliver fresh groceries in Florida’s Miami-Dade County.


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