Walmart
Tasha heads to checkout at a Walmart Store in Chicago, November 23, 2012. Black Friday, the day following the Thanksgiving Day holiday, has traditionally been the busiest shopping day in the United States. Reuters/Stringer

There is going to be an explosion in online shopping and its sweep is going to cover the grocery market in a big way. Consumers will start avoiding busy stores for the convenience of shopping 24/7 from anywhere. Online buying used to be brisk during holiday seasons. Then consumers were ready for buying, everything ranging from flower to clothing, electronics, music and even caskets.

Increasing Penetration

Online grocery shopping is witnessing a huge uptick. Despite being a small segment in food and beverage sales, its online appeal is increasing rapidly and the business is all poised for tremendous growth in the next several years. The main growth is in the food and beverage segments, and it is getting adequate push from the social media in terms of brand promotions and offers to the customers.

A new report from the market research group Packaged Facts says online grocery sales will grow from $23 billion in 2014 to nearly $100 billion by 2019, and will capture 12 percent of total grocery spending. The report notes that "by meeting the crossroads of technology and service," online grocery shopping will offer grocery industry's most exciting potential because it is the fastest-growing channel in the grocery arena.

David Sprinkle, research director of Packaged Facts, also attests that the U.S. consumers have become increasingly comfortable with shopping for groceries via Internet and are loving its home delivery and easy pickup of pre-picked orders. A report in Business Insider also asserts that e-commerce is fast carving up in the groceries market, which had been the biggest untapped e-commerce opportunity. It is estimated that Americans spend $600 billion a year on groceries. At present, less than one percent of those sales are occuring online. However, same-day delivery services, specialty grocers, and meal-preparation businesses as the value additions will be driving more growth in online groceries, the report noted.

Space for All

Along with the booming prospects, the landscape of online grocery business is also seeing a surge in new players. It is turning into a scene of happy coexistence. Along with the well-established firms, many new players who entered the business in the past few years are also surviving and seeking more customers, says Food Product Design News.

Many of those firms are evolving and are at test-marketing phases. Companies such as Amazon.com and Walmart will always an edge over other players because of their inherent strengths in terms of substantial infrastructure, warehouses, advanced logistics and delivery systems, clout with suppliers and a wide range of products. But online grocery business with unique challenges will offer space for all kinds of players to reach their potential. The research report affirms that online grocery service providers will invent new business models to solve the logistics puzzles and still stay profitable.