FMI says switch to online grocery sales going faster than expected
The pace at which Americans are going online to purchase groceries is picking up and that may mean that a large majority of shoppers will bypass stores to place orders in as few as five years, according to a report by the Food Marketing Institute (FMI) and Nielsen.
The findings of the research are significant for a number of reasons. For one, it shows that the adoption rate is growing much faster than previously forecast. FMI and Nielsen had previously forecast that online grocery sales would reach $100 billion nationally by 2025. The new forecast sees that number being reached as early as 2022 with 70 percent of consumers going online to shop for groceries.
Today, 49 percent of U.S. consumers shop for grocery products online. While 61 percent of Millennials shop online for groceries, the younger generation is not alone in this respect. Fifty-five percent of those in Generation X, 41 percent of Baby Boomers and 39 percent of the Greatest Generation do the same.
According to FMI and Nielsen, many grocers and their CPG partners are not yet prepared to adequately handle the challenges facing them. Today, only seven percent of retailers and 22 percent of manufacturers believe they have the right organizational skill set to succeed in a digital environment.
The research has identified transformational imperatives for retailers and CPGs to succeed. These include:
- Integrating digital offerings with brick-and-mortar operations;
- Scrubbing data files to eliminate discrepancies;
- Integrating online and offline forecasting;
- Optimizing shopper insights by combining retailer and manufacturer information;
- Improving omnichannel marketing and promotions; and
- Merging in-store shelf and online inventory capabilities to enable consumers to see the same information whether they are online or in a store.
FMI and Nielsen believe that both retailers and manufacturers will be better served by finding areas where they can work together.
- FMI and Nielsen Report: 70% of Consumers Will Be Grocery Shopping Online by 2024 – Food Marketing Institute/Nielsen
DISCUSSION QUESTIONS: Do you think retailers and CPG brands are being caught by surprise at the pace at which Americans are going online to buy their groceries? What are the keys for those looking to keep pace with the changes in the marketplace while staying profitable at the same time?