The Future of Online Grocery Shopping in the United ... - Kantar Retail

State of the Industry:
The Future of Online Grocery Shopping
in the United States … Is Here

Table of Contents
/ Authors
Anne Zybowski
Vice President
anne.zybowski@kantarretail.com
Rachel McGuire
Senior Analyst
rachel.mcguire@kantarretail.com
Table of Contents
/ Kantar Retail
Suite 1000, 245 First Street, Cambridge, MA 02142 USA
www.kantarretail.com / www.kantarretailiq.com
© 2012 Kantar Retail. All rights reserved.
© 2012 Kantar Retail
The Future of Online Grocery Shopping in the United States … Is Here
Foreward .....................................................................................................................................................2
HOW BIG: The Online Grocery Market in the United States Today ..........................................................3
WHO Shops Online for Groceries? ............................................................................................................5
WHERE Do Shoppers Shop Online for Groceries? ...................................................................................7
WHY Buy Groceries Online? The Shopper Perspective ............................................................................9
WHY NOT Shop Online? Barriers to the Growth of Online Grocery .......................................................18
LOOKING FORWARD: Where Do We Go From Here? .............................................................................21
No part of this work may be reproduced or transmitted in any form or by any means, electronic or mechanical,
including photocopying, recording, or by any information storage and/or retrieval system, without permission in
writing from the publisher.
- 1 -
/ Contributors
Mary Brett Whitfield
Senior Vice President
marybrett.whitfield@kantarretail.com
Debra Miller Arebesman
Senior Associate, Retail & Consumer Products
darbesman@compete.com

Foreward
© 2012 Kantar Retail
The Future of Online Grocery Shopping in the United States … Is Here
The notion of online grocery shopping breaking into the mainstream is highly refuted across the industry, with
many insisting that it will never be successful in the United States outside of a few cities with high population
density such as New York and San Francisco. Yes, there are some regional or new delivery players in select
markets that are testing online grocery models, but naysayers claim it is not sustainable and will never be
profitable. Contrary to conventional wisdom, Kantar Retail is predicting that U.S. online grocery shopping is
about to explode—and it’s not a matter of “IF,” it’s a question of “WHEN.”
Contrary to conventional wisdom, Kantar Retail
is predicting that U.S. online grocery shopping is
about to explode—and it’s not a matter of “IF,” it’s a
question of “WHEN.”
As Kantar Retail looks across the global landscape, online grocery shopping is evolving dramatically in the
form of home delivery and other “click & collect” models—with the UK and France leading the way. Certainly
there are many differences in the evolution of online shopping in general as well as retail market development
across these three markets, but the fact remains that online grocery shopping is growing quickly across the
board—especially as retailers figure out ways to deliver convenience to grocery shoppers without necessarily
incurring the cost of the last mile associated with home delivery. Innovation in click & collect models promises
to accelerate the growth of online grocery in all three markets. Yes, even in the United States.
To support our hypothesis, Kantar Retail partnered with Compete (a Kantar Media company) to delve into
the state of online grocery shopping in each market today by getting a read on why and how shoppers buy
groceries online—as well as understand what the barriers are for those who don’t shop online today for
groceries.
Understanding the state of the market today and the insights contained in this report are critical for retailers
and manufacturers alike to prepare for the future, today.
Innovation in click & collect models promises to
accelerate the growth of online grocery.
- 2 -

© 2012 Kantar Retail
HOW BIG: The Online Grocery
Market in the United States Today
Much of the skepticism about the future of online grocery stems from the low penetration levels today. While
total online sales accounted for 7% of total U.S. retail sales in 2011, category penetration varies widely. Online
penetration in music, videos, and electronics sales is over 20%, yet online grocery accounts for less than 1%
of total grocery sales today. But Kantar Retail forecasts that by 2020 online penetration of grocery sales will
more than quadruple and represent nearly USD50 billion in sales (Figure 1).
21%
32%
27%
Computer hardware
36%
12%
18%
21%
Office equipment &
supplies
30%
4%
9%
24%
Music & videos
45%
2%
9%
18%
Electronics & appliances
31%
3%
7%
15%
Sporting goods
Source: U.S. Department of Commerce and Kantar Retail
Figure 1: Online Share of Total Category Spending
25%
11%
6%
10%
Computer software
21%
3%
6%
- 3 -
10%
Books & magazines
33%
4%
7%
11%
Toys, hobby goods, &
games
20%
2%
5%
10%
Clothing & clothing
accessories
20%
2%
7%
8%
Autos
15%
1%
4%
7%
Furniture & home
furnishings
15%
2002
2007
2012E
2020F
1%
1%
2%
6%
0%
1%
1%
4%
Kantar Retail forecasts that by 2020 online penetration
of grocery sales will more than quadruple and
represent nearly USD50 billion in sales.
Drugs, health & beauty
aids
Food, beer, & wine

Despite the limited penetration of online grocery sales, online shopping habits are “sticky” among shoppers
who already shop online: 11% of these shoppers have purchased groceries online (Figure 2).
27%
Books *
49%
30%
Media#
© 2012 Kantar Retail
42%
65%
Apparel
35%
29%
30%
Electronics
Figure 2: Categories Purchased in Last 3 Months: In-Store vs. Online
47%
*Physical and electronic; #Movies, music, and video games
**Paper products, cleaners, laundry supplies, etc.
***Including furniture
Source: Compete Online Intelligence Study, Spring 2012; Kantar Retail analysis
26%
Shoes
70%
25%
Health & beauty
products
49%
16%
Office & school supplies
28%
HOW BIG: The Online Grocery Market in the United States Today
In-Store Online
Baby, children & toys
15%
22%
Jewelry & accessories
- 4 -
15%
31%
13%
Kitchenware & HH
appliances
50%
Pet supplies
12%
91%
Groceries
11%
21%
Sporting goods
11%
82%
10%
HH essentials **
39%
HI products & tools
9%
22%
Home furnishings ***
8%
43%
Garden supplies
7%

© 2012 Kantar Retail
WHO Shops Online for Groceries?
As a first step in understanding online grocery shopping behavior and where it might be headed, it is
worthwhile to take a closer look at the 11% of shoppers who say they are already buying at least some of their
groceries online. There are some key demographic differences between online and in-store grocery shoppers
but also a few areas where one might be surprised to see essentially no difference. These differences (and
lack thereof) suggest that online grocery shopping is already a part of the shopping routine for households
across a wide range of needs (Figure 3).
Online grocery shoppers are significantly more likely than their in-store counterparts to be male and
young. In particular, online grocery shoppers are more likely to be younger Gen X or older Gen Y. As Gen
Y shoppers continue to enter the household formation life stage and establish shopping routines, shopping
online for a whole range of products—including groceries—is likely to be a cornerstone of those routines.
The income differences of in-store vs. online grocery shoppers are not as pronounced as one might think.
In fact, shoppers at both the very low and very high ends of the income spectrum are more likely to buy
groceries online.
There is virtually no difference between online vs. in-store shoppers in terms of how likely they are to have
children living at home. And perhaps most surprisingly, the percent of online and in-store shoppers who
fall into the 65+ age group is nearly identical.
Figure 3: WHO Shops Online for Groceries—The 11%: Affluent, Male, Gen Y
48%
57%
52%
43%
41%
33%
2% 3%
22% 21% 20% 16% 13% 9% 10% 10%
Male Female 18-24 25-34 35-44 45-54 55-64 65+
33%
34%
66%
65%
Children in HH No children in
HH
32%
Note: Arrows indicate significant difference between in-store and online grocery purchasers (90% confidence level)
Source: Compete Online Intelligence Survey, Spring 2012; Kantar Retail analysis
36%
- 5 -
27%
23% 23% 20%
12%
6%
13% 9%

Online grocery shoppers are on the leading edge of online shopping in general. These are savvy online
shoppers for whom all kinds of goods are just a click away. About 13% of online grocery shoppers say they
are daily online shoppers (compared with just 5% of all shoppers), and they are more likely than average to
purchase a wide range of products online (Figure 4).
Index vs. All Shoppers
Categories in the bottom-right corner represent the most “mainstream” online categories: a relatively
high percentage of online grocery purchasers purchase these categories online, but so does everyone
else. These are the categories with the highest online penetration overall. Shoes, electronics, movies,
and books all have high double-digit online penetration that is growing quickly.
Categories in the upper-right corner—household essentials, kitchenware and household appliances, and
HBC products—represent the “leading edge” categories for online shopping. A relatively high percentage
of online grocery purchasers also purchase these categories online, and they are significantly more likely
than the average shopper to do so. These leading edge categories represent an “expanded grocery trip,”
and suggest that solution selling around that expanded trip might resonate strongly with online grocery
shoppers.
450
400
350
300
250
200
150
© 2012 Kantar Retail
Furniture/home furnishings
Garden supplies
Sporting goods
Figure 4: Categories Purchased Online by Online Grocery Purchasers
Jewelry & accessories
Home improvement
products/tools
Pet supplies
Office/school supplies
Baby, children, & toys
- 6 -
WHO Shops Online for Groceries?
Electronics
Movies, music, Books
100
video games
10% 20% 30% 40% 50% 60%
% of Online Grocery Purchasers Who Also Purchase Category
Source: Compete Online Intelligence Study, Spring 2012; Kantar Retail analysis
High Penetration, High Index
HH essentials
Kitchenware & HH
appliances
Shoes
Apparel
HBC

© 2012 Kantar Retail
WHERE Do Shoppers Shop Online
for Groceries?
While this will likely surprise most readers, Amazon dominates in terms of where shoppers shop for groceries
online: more than one-half of online grocery shoppers indicate they shop for groceries on Amazon.com. The
number is even more surprising when factoring in the fact that Amazon doesn’t sell fresh foods, but “grocery”
is a broad category that is more than just fresh foods.
Safeway.com, with its more comprehensive fresh grocery offer, places a respectable second. However,
the true online grocers such as Safeway, Fresh Direct, and Amazon Fresh emerge as more likely grocery
shopping destinations when focusing in on the shoppers who report doing all their grocery shopping online
(Figure 5).
56%
Amazon.com
43%
18%
Safeway.com
34%
Figure 5: Where Shoppers Shop for Groceries Online
14%
15%
10%
11%
8% 7% 7%
10%
7% 5% 5%
FreshDirect.com
*Purchased groceries online in past 3 months, and did not purchase groceries in a store during that time.
Source: Compete Online Intelligence Survey, Spring 2012; Kantar Retail analysis
Alice.com
Peapod.com
All Online Grocery Shoppers Online-ONLY Grocery Shoppers*
Amazon dominates in terms of where shoppers shop
for groceries online.
- 7 -
Amazon Fresh
Netgrocer.com
Meijer.com
6%
28%
Other
23%

© 2012 Kantar Retail
- 8 -
WHERE Do Shoppers Shop Online for Groceries?
Distinguishing between shopping a retailer such as Amazon for groceries versus a true online grocer
scratches the surface of an important divide among online grocery shoppers. Along a number of dimensions,
it is useful to consider the “casual” online grocery shopper versus the “dedicated” online grocery shopper:
Casual online grocery shoppers are most likely to say that they shop on Amazon.com for groceries. In general,
these shoppers spend less per online grocery order and are buying groceries online when they can get a good
deal, perhaps on a hard-to-find product. About nine in 10 of these shoppers say they order groceries online and
have them delivered via mail, but many (four in 10) do it on an infrequent basis (less than monthly). The casual
online grocery shopper cherry picks deals on specific products from Amazon, and online grocery shopping has
not replaced the grocery trip to a physical store for these shoppers.
Dedicated online grocery shoppers, on the other hand, are more likely to shop true online grocers like
Safeway.com or Peapod.com. The dedicated online grocery shopper buys groceries online primarily
because it saves time and has shifted a portion of her grocery shopping away from a physical store and to
the web. Less than one-half of these shoppers say they shop for groceries in a physical store on a weekly
basis, and their typical online grocery baskets are significantly larger, both in terms of number of items
and total basket ring. About 60% of these dedicated shoppers say they prefer to do their stock-up grocery
shopping online, plus 40% prefer online for fill-in purchase; and nearly three in 10 even prefer online for
making immediate consumption purchases (Figure 6).
Figure 6: Percent Who Prefer Online Grocery Shopping for Specific Trip Types
Stock-up
Fill-in
Immediate use
21%
29%
32%
33%
41%
Casual Online Grocery Shoppers Dedicated Online Grocery Shoppers
Source: Compete Online Intelligence Study, Spring 2012; Kantar Retail analysis
60%

© 2012 Kantar Retail
WHY Buy Groceries Online?
The Shopper Perspective
In general, shopping online is thought of as a way to either purchase goods in a very convenient way OR
purchase them at a lower price. While this is obviously a false dichotomy as both reasons influence online
purchasing, it is informative to ask shoppers to choose which is more important: time or money.
When asking shoppers to indicate which side of the “save time vs. save money” issue best describes why they
shop online, online grocery shoppers are decidedly more likely than the average online shopper (56% vs. 46%)
to fall into the “save time” camp—suggesting that these shoppers may be willing to pay a small premium for
the convenience of online grocery shopping. Based on the fee structure of most online grocers in the United
States today, particularly the “traditional grocers” who offer home delivery, this is how it is currently playing
out in the marketplace as grocers charge an additional fee to cover delivery costs.
More broadly taking a look at the retail landscape and reasons why shoppers are drawn to online purchasing,
there are three main (and intersecting) driving forces behind why shoppers choose to shop and purchase
online: convenience, price, and assortment (Figure 7).
Figure 7: Reasons for Purchasing Groceries Online
Type Online
Grocery Shopper Kids in HH Age Income* Gender
Under
Have
Total Dedicated Casual No Yes 45 45+ Nots Haves Male Female
Sample Size 275 95 160 179 93 178 97 160 115 156 119
Convenience
Convenient to have groceries delivered to my
front door
44% 43% 51% 47% 42% 46% 41% 54% 31% 51% 36%
Saves time 36% 54% 31% 39% 30% 34% 38% 31% 41% 36% 35%
I don’t have to carry heavy items home 30% 28% 29% 28% 36% 28% 34% 36% 22% 27% 35%
Easier to find what I need 26% 24% 31% 18% 43% 27% 26% 27% 26% 30% 23%
Easier to purchase groceries online when
I’m already researching product information
online
15% 19% 18% 9% 28% 17% 11% 16% 14% 18% 12%
It takes me longer than expected to shop in
stores
10% 18% 11% 12% 6% 8% 12% 12% 7% 10% 9%
Price
Saves money 41% 40% 54% 39% 45% 42% 40% 43% 38% 46% 35%
Special promotional deal (e.g., $x off delivery
fee or next order)
30% 29% 32% 31% 29% 32% 27% 33% 25% 30% 30%
Helps me stick to a budget 21% 16% 26% 17% 30% 26% 12% 28% 13% 26% 15%
Easier to browse deals and coupons 16% 19% 20% 17% 17% 14% 22% 13% 22% 17% 16%
Assortment
There is a wider variety of grocery products
available online
Quality of produce and fresh items is often
times better than that in stores
30% 20% 41% 27% 35% 29% 32% 34% 24% 31% 28%
15% 22% 20% 15% 18% 19% 10% 14% 17% 19% 12%
*Kantar Retail groups US households into 2 segments based on household income that also closely correlates with divergent shopping and spending behavior:
“Haves” > $60K per year, and the “Have Nots” < $60K
Note: Bolding/highlighting indicates significantly greater vs. all shoppers (95% confidence level)
Source: Compete Online Intelligence Study, Spring 2012; Kantar Retail analysis
- 9 -

Convenience. In terms of why shoppers buy groceries online, the ability to have groceries delivered to one’s
door is the most frequently cited reason: 44% of online grocery shoppers do so because of the convenience of
having the groceries delivered to their doors, while better than one-third say online grocery shopping saves
them time. Males (51%) and lower-income households, “Have Nots” (54%), are significantly more likely to cite
home delivery as the reason for online purchasing. Dedicated online grocery shoppers also are particularly
keen on the convenience factor of online grocery shopping, with 51% citing the ability to have groceries
delivered to their door as a reason for buying online, compared with only 43% of casual online grocery
shoppers.
The time of day and day of the week when shoppers say they do their online grocery shopping also speaks
volumes about the convenience motivation of online grocery shopping: it’s most likely to happen in the middle
of the week during work hours (Figure 8)! This is consistent with figures reported by U.K. retailer Tesco,
which show that the retailer’s online business’s contribution to its total sales peaks during the morning
hours (Figure 9). Shoppers are likely to be squeezing online grocery shopping into their busy days, and online
grocery retailers that are easily navigable, help shoppers quickly fulfill their lists, and offer a consistently
competitive price (eliminating the need to shop around) will thrive under these conditions.
Figure 8: When Shoppers Do Their Online Grocery Shopping
16% 16%
5%
SUN
6:00-
8:59 a.m.
Source: Compete Online Intelligence Study, Spring 2012; Kantar Retail analysis Source: Kantar Retail analysis, Company presentation
© 2012 Kantar Retail
23%
MON
9:00-
11:59 a.m.
8%
22%
TUE
Noon-
2:59 p.m.
24%
16%
WED
3:00-
4:59 p.m.
8%
Day of Week Time of Day
14%
13%
14%
THU
5:00-
7:59 p.m.
13%
8%
FRI SAT
8:00- 11:00 p.m.-
10:59 p.m. 5:59 a.m.
- 10 -
WHY Buy Groceries Online? The Shopper Perspective
The time of day and day of the week when shoppers
say they do their online grocery shopping also speaks
volumes about the convenience motivation of online
grocery shopping: it’s most likely to happen in the
middle of the week during work hours.
Figure 9: Tesco.com Contribution to Sales
by Hour of the Day
Dotcom as
% of Hourly
Sales% Dotcom Contribution to Sales Across the Day Sales
12%
35%
10%
30%
25%
8%
20%
6%
15%
4%
10%
5%
2%
0%
0%
-5%
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Hour
DocCom Store DotCom Sales as % of Hour

Price. Price also is a frequently cited reason for purchasing groceries online: 41% of shoppers who buy
groceries online say they do so because it saves them money. Further, an examination of the reasons for
buying groceries online among key demographic groups indicates that different groups of shoppers see
different ways to save money by purchasing groceries online.
Over one-quarter of Gen Y/Gen X, lower-income “Have Nots,” and male shoppers say that one of the
reasons they buy groceries online is because it helps them stick to a budget. For these shoppers, the
running total for their online grocery cart helps them stay on budget and avoid the temptation of impulse
items that might get added during a trip to the store.
On the other hand, more affluent shoppers (household income $60k+) like the ease of browsing deals and
coupons while shopping for groceries online. For these shoppers, the online platform makes it easier for
them to feel like they’re getting a “good deal.”
Tesco positions its online grocery business as meeting both of these money-saving needs (while delivering
on convenience and ability to save shoppers time), offering tools to help shoppers stay on-budget and avoid
the temptation of impulse purchases, while at the same time enticing them with a good deal (in this case,
£10 off their next order) if they are able to stay on-budget (Figure 10).
© 2012 Kantar Retail
Figure 10: Tesco UK: Online Value Proposition Calls Out Saving Time & Money, “Stick to Your Budget”
Source: Company mailers, Kantar Retail analysis
- 11 -
WHY Buy Groceries Online? The Shopper Perspective

Not only does price figure prominently among reasons to shop for groceries online, it also ranks among the
key reasons for choosing retailers. Everyday low prices (EDLP) tops the list of reasons why shoppers are loyal
to one online grocer, while promotional pricing claims the top spot for reasons why shoppers shop around
online for groceries (Figure 11).
This suggests that promotional pricing may be a powerful tool in enticing shoppers to “try” an online
grocery retailer, but consistently competitive or low prices are key in getting shoppers to “stick” with
an online grocer. Loyalty cards and personalized promotions would also play a role in establishing a
perception of “reasonably priced grocery products” among shoppers.
With the price transparency that the online environment facilitates, the competition is just one click away.
As the U.S. online grocery market continues to expand and give shoppers more alternatives, the balance
between promotional pricing and EDLP online will become increasingly important for attracting and
keeping shoppers.
© 2012 Kantar Retail
- 12 -
WHY Buy Groceries Online? The Shopper Perspective
Figure 11: Why Shoppers are Exclusive to One Online Player, or Shop Multiple Online Players
Why Shop Only One Online Grocer
This retailer has reasonably
priced grocery products
This specific retailer sells
everything I need
This retailer has the lowest
delivery fees
I am a member of this retailer’s
loyalty program
I purchase all my groceries at
their stores
It’s the only retailer that sells
groceries online in my area
13%
10%
24%
22%
31%
38%
Source: Compete Online Intelligence Study, Spring 2012; Kantar Retail analysis
I purchase from the retailer with the best
promotional deals that week
I purchase from the retailer with the widest
selection of grocery products
I purchase from the retailer with the lowest
delivery fees
I purchase from the retailer that can deliver my
groceries fastest
I purchase from the retailer with the website
that is easiest to navigate
I purchase from the retailer with the best pickup
window of availability
Why Shop Multiple Online Grocers
16%
29%
27%
34%
42%
62%

Digging a bit deeper, the differences between casual and dedicated online grocery shoppers reveals some key
differences in motivations for purchasing groceries online (Figure 12).
The biggest difference between these two groups is along the “save time vs. save money” dimension: casual
online grocery shoppers are significantly more likely to cite saving money as a reason for buying groceries
online (54% vs. 40%), while the dedicated shoppers are significantly more likely to cite the time-saving
advantages of buying groceries online (54% vs. 31%).
This important difference suggests that the dedicated grocery shoppers who shop the traditional online
supermarket-type retailers are more likely to have integrated online grocery shopping into their overall
grocery shopping routine, are moving shopping trips and baskets away from the store to online, and
may be willing to pay a small premium for the convenience that online grocery shopping offers. These
shoppers are much more likely to cite that it takes longer than expected to shop in stores, reinforcing the
willingness to trade a convenience fee for their time.
© 2012 Kantar Retail
Figure 12: Why Shoppers Purchase Groceries Online
Saves money
Convenient to have groceries delivered to my front door
Wider variety of grocery products available online
Special promotional deal
Easier to find what I need
Saves time
Don’t have to carry heavy items home
Helps me stick to a budget
Easier to browse deals and coupons
Quality of produce and fresh items is better than in stores
Easier to purchase online when I’m already researching online
It takes me longer than expected to shop in stores
Source: Compete Online Intelligence Survey, Spring 2012; Kantar Retail analysis
- 13 -
11%
WHY Buy Groceries Online? The Shopper Perspective
16%
20%
19%
20%
22%
20%
19%
18%
18%
24%
28%
29%
26%
29%
32%
31%
31%
Dedicated Online Grocery Shoppers Casual Online Grocery Shoppers
40%
41%
43%
51%
54%
54%

In addition to saving money and sticking to a budget, those casual shoppers who are most likely turning to
Amazon.com for some of their grocery purchases are significantly more likely to cite the convenience of
home delivery and wide variety of product assortment as reasons for shopping online. At first, this point
on assortment may seem like a contradiction given Amazon does not offer fresh groceries, but Amazon is
incredibly successful at selling the long-tail and in the categories it sells, share often over-indexes toward
brands that are sustainable, natural, organic, or cater to specialized needs (e.g., gluten-free). While
Amazon doesn’t sell as many grocery categories as a traditional supermarket, it offers a much broader
assortment where it plays.
These findings highlight a challenge that Amazon faces overall. The “grocers” are winning the online basket,
Amazon is winning one item at a time. As Amazon expands its assortment in consumables and grocery, it
is looking to leverage frequency to build baskets, versus the item-merchandising (and selling) environment
that it operates in today. The shopper dynamics of purchasing some items with Amazon (with low $25, if any,
shipping minimums) vs. full, multi-category baskets of groceries from online grocers (typically with high
purchase minimums, often $50+) are quite different.
These findings highlight a challenge that Amazon
faces overall. The “grocers” are winning the online
basket, Amazon is winning one item at a time.
Assortment. The top grocery categories purchased online are markedly different from what one would
expect in a typical in-store grocery basket. Non-perishable foods and health and beauty care products top the
list of categories that online grocery shoppers report purchasing, with between two-thirds and three-quarters
of shoppers indicating they purchase those categories online at least occasionally. Fresh grocery categories
are less commonly purchased online, edging out only niche categories (such as pet care and baby care).
Even among online grocery purchasers, between one-third and one-half say they never purchase “fresh”
categories online (Figure 13).
However, simply looking at what’s in the basket of online grocery shoppers in the aggregate can be misleading
because so many of these U.S. online grocery shoppers are shopping only Amazon.com, which doesn’t offer
the fresh items one would typically see in an in-store grocery basket. Indeed, the differences are especially
pronounced between those casual grocery shoppers on Amazon.com or Alice.com versus dedicated shoppers
frequenting one of the traditional online grocers such as Safeway.com or Peapod.com (Figure 14). The grocery
assortment of each set of retailers is reflected in what their shoppers purchase online:
Health and beauty care products, non-perishable food items (tea/coffee, candy, snacks), and household
essentials are the grocery items most likely to be in the online shopping carts of Amazon and Alice
shoppers. Since Amazon and Alice do not sell fresh grocery items, it is not surprising that relatively small
numbers of their shoppers purchase those fresh categories online.
© 2012 Kantar Retail
- 14 -
WHY Buy Groceries Online? The Shopper Perspective

© 2012 Kantar Retail
Figure 13: Types of Grocery Items Purchased Online
Tea/coffee
Personal care/toiletries
Salty snacks/crackers
Condiments/sauces
Cereals
Canned foods
Health care/OTC
Cookies/candies/sweets
Beauty care/cosmetics
Laundry care
Frozen foods
Cleaning supplies
HH paper products
Meat and fish/deli
Fruit and vegetables/produce
Non-alcoholic beverages
Dairy
Bakery
Chilled/convenience foods (ready meals)
Wine/beer/alcohol
Pet food/supplies
Air care
Baby essentials (e.g., diapers, wipes, etc.)
Baby accessories (e.g., bottles, pacifiers, etc.)
Baby food
16%
12%
12%
24%
22%
22%
Source: Compete Online Intelligence Survey, Spring 2012; Kantar Retail analysis
- 15 -
50%
48%
47%
47%
46%
44%
42%
39%
39%
39%
38%
37%
36%
36%
33%
33%
33%
31%
31%
21%
18%
21%
21%
23%
23%
14%
13%
18%
15%
17%
23%
21%
18%
24%
25%
28%
26%
21%
19%
30%
20%
28%
Typically / Occasionally Promo / Impulse Never
WHY Buy Groceries Online? The Shopper Perspective
23%
25%
64%
66%
70%
51%
53%
55%
55%
55%
49%
52%
46%
52%
32%
34%
33%
38%
27%
27%
29%
31%
37%
36%
42%
35%
37%

© 2012 Kantar Retail
Figure 14: Grocery Categories Purchased Online* by Casual vs. Dedicated Online Grocery Shoppers
Personal care & toiletries
Health care & OTC medications
Tea & coffee
Cookies, candies, & sweets
Laundry care
Cleaning supplies
Salty snacks & crackers
Cereals
Paper products
Beauty care & cosmetics
Condiments and sauces
Canned foods
Frozen
Bakery
Wine/beer/alcohol
Pet supplies
Non-alcoholic beverages
Meat & fish/deli
Air care
Chilled/convenience foods
Dairy
Fruit & vegetables/produce
Baby essentials
Baby accessories
Baby food
29%
*Purchase category online at least occasionally.
Source: Compete Online Intelligence Survey, Spring 2012; Kantar Retail analysis
- 16 -
34%
39%
39%
37%
WHY Buy Groceries Online? The Shopper Perspective
49%
48%
46%
44%
42%
42%
51%
50%
54%
56%
53%
58%
61%
67%
71%
76%
79%
76%
75%
75%
70%
69%
68%
68%
66%
64%
61%
61%
79%
78%
79%
77%
78%
80%
84%
83%
83%
83%
82%
80%
87%
88%
88%
88%
90%
Dedicated
Casual
Fresh

Among shoppers who shop retailers that offer a fresh assortment (i.e., Safeway.com, Peapod.com, etc.),
purchasing of fresh categories is extremely common. About four out of every five shoppers of online grocers
purchase fresh categories (i.e., frozen, bakery, meat, chilled convenience foods, produce, and dairy) online
at least occasionally, dispelling the notion that shoppers will not purchase fresh groceries online if given the
opportunity.
What do these glimpses into the online shopping behavior of early adopters tells us about where the nascent
U.S. online grocery business is headed?
1. Shoppers have an appetite for purchasing groceries online, even today where online grocery shopping
often means paying more for delivery/convenience.
2. Produce and fresh products are already in the basket, dispelling the notion that all shoppers want to
pick out their own perishables. This trend is particularly acute when looking specifically at Gen Y/Gen X
shopper behavior (Figure 15); beyond the three baby-related category which significantly over-index as
you would expect due to life stage, Gen Y/Gen X shoppers are significantly more likely to purchase fresh
categories (in green) online, quickly followed by alcoholic and non-alcoholic beverages.
Given the proclivity that both the casual and dedicated online shoppers have to purchasing online, as online
grocery shopping options proliferate across the United States and more shoppers have the ability to buy
groceries online, fresh categories will be a critical part of the online basket—just as they are among in-store
grocery shoppers—more evidence that lends credence to our “when not if” prediction.
355
335
© 2012 Kantar Retail
268
Figure 15: Grocery Categories Purchased Online at Least Occasionally:
Index of Gen Y/Gen X to Boomers/Seniors
194 182 178 170 163 157 148 143 141 139 137 136 134 133 133 126 114 113 111 110 105 99
Source: Compete Online Intelligence Survey, Spring 2012; Kantar Retail analysis
- 17 -
WHY Buy Groceries Online? The Shopper Perspective
Index of 100 =
Gen Y/Gen X and
Boomers/Seniors
equally likely to
purchase online

© 2012 Kantar Retail
WHY NOT Shop Online? Barriers to
the Growth of Online Grocery
If online grocery shopping is going to become a more mainstream shopping activity in the United States, what
barriers will retailers need to overcome? Why don’t more shoppers purchase groceries online today? We must
understand these barriers to predict how the U.S. online grocery market will need to evolve.
Ironically, the primary reason shoppers cite for being hesitant to adopt online grocery shopping is price, the
second-most important reason cited for buying groceries online.
Price. While those who have already moved some of their grocery shopping online recognize that buying
groceries online can help them save money, price (in several different forms) is one of the top reasons cited
for not purchasing online (Figure 16). About one-half of shoppers say they do not purchase groceries online
because they do not want to pay delivery fees, while about one-quarter say that prices are too high online or
that it’s easier for them to stick to their budget if they shop in store.
Figure 16: The Barriers: Reasons Why Groceries Are Not Shopped Online
I don’t want to pay delivery or shipping fees
I don't trust others to choose my fresh food items
I like to explore the store and add items not on my list
I enjoy shopping the store and prefer to experience in
person
Prices are too high
I worry that my food will spoil or get damaged while on
the delivery truck
I worry that my food will spoil or get damaged in the mail
It is easier to stick to my budget if I shop in stores
I would have to plan too far in advance
No grocery stores in my area accept online grocery
orders
Delivery windows are too wide; don’t want to be stuck at
home for hours waiting for delivery
My preferred grocery retailer does not accept online
grocery orders
Products are not available in the quantity I would prefer
to purchase
I like the idea of having someone else shop for me, but
it’s too time consuming to change shopping habits
I have tried shopping online, but can’t find all the
products that I often purchase in the store
Source: Compete Online Intelligence Survey, Spring 2012; Kantar Retail analysis
- 18 -
6%
5%
4%
13%
15%
15%
19%
25%
25%
24%
23%
32%
31%
37%
47%
Cost/price
Trust/store
experience
Delivery-related
Grocery/product
availability
Other

Digging down another level into the barriers by key demographic segments illuminates some actionable
insights as we take a look at each of the five segments of barriers—price, trust/store experience, delivery
issues, planning, and availability (Figure 17). Let’s start with the number one barrier, price:
Female shoppers are significantly more likely than their male counterparts to cite all three price
barriers: don’t want to pay delivery, prices too high, and can stick to a budget shopping in stores. This
is consistent with the reason why shoppers do shop online where females are significantly less likely
to shop online to save money and stick to a budget. For online grocery retailers to win female shoppers
in particular (who make up the lion’s share of primary grocery shoppers in U.S. households), price
perception and ability to stick to a budget are the keys to the kingdom. Online retailers will have to
communicate not only competitive prices but put delivery/shipping fees into a value context in order to
win her basket.
© 2012 Kantar Retail
WHY NOT Shop Online? Barriers to the Growth of Online Grocery
Figure 17: Reasons for Not Purchasing Groceries Online, by Demographic Segment
*Kantar Retail groups US households into 2 segments based on household income that also closely correlates with divergent shopping and spending behavior:
“Haves” > $60K per year, and the “Have Nots” < $60K
Note: Bolding/highlighting indicates significant difference between demographic segments, e.g., male vs. female (95% confidence level)
Source: Compete Online Intelligence Study, Spring 2012; Kantar Retail analysis
Kids in HH Age Income* Gender
No Yes Under 45+ Have Haves Male Female
45
Nots
Sample Size 1372 709 1171 911 1228 854 995 1087
Price Don’t want to pay delivery/shipping fees 49% 44% 44% 51% 47% 48% 44% 50%
Prices are too high 25% 27% 24% 27% 24% 28% 23% 28%
Easier to stick to my budget if I shop in
stores
26% 18% 20% 27% 26% 20% 20% 26%
Trust/Store Experience Don’t trust others to choose my
produce, meat, eggs, and other items
39% 33% 31% 45% 37% 37% 36% 38%
I like to explore the store and add items
not on my list
34% 28% 27% 37% 32% 32% 30% 33%
I enjoy shopping the store and prefer to
experience in person
33% 27% 29% 34% 33% 29% 30% 32%
Delivery I worry that my food will spoil/get
damaged while on delivery truck
24% 27% 27% 23% 27% 22% 26% 24%
I worry that my food will spoil/get
damaged in the mail
24% 25% 24% 25% 26% 22% 23% 25%
Delivery windows are too wide 16% 12% 14% 17% 15% 15% 15% 15%
Availability No grocery stores in my area accept
online grocery orders
14% 17% 14% 17% 17% 14% 14% 17%
My preferred grocery retailer does not
accept online grocery orders
13% 14% 12% 14% 13% 13% 13% 13%
Products are not available in the
quantity I would prefer to purchase
6% 5% 6% 5% 6% 6% 6% 6%
I have tried shopping online, but can’t
find all the products that I often
purchase in the store
4% 4% 5% 3% 3% 5% 4% 4%
Planning I would have to plan too far in advance 19% 17% 17% 20% 19% 18% 18% 19%
I like the idea of having someone else
shop for me, but it’s too time consuming
to change shopping habits
3% 7% 7% 2% 4% 6% 6% 4%
- 19 -

© 2012 Kantar Retail
WHY NOT Shop Online? Barriers to the Growth of Online Grocery
Shoppers have a slightly different perception of price as a barrier depending on their income level. While
the general perception is that online grocery prices are too high/higher than in-store, the less affluent
“Have Nots” have concerns more specifically about sticking to a budget. The ability to stick to a budget is
one of the top reasons cited by “Have Nots” for buying groceries online, and communicating to potential
shoppers how that is possible will be key to online grocery penetration for this group.
Households with kids at home is the other critical factor that significantly impacts willingness to purchase
groceries online. Households without kids at home are significantly more likely to cite price as a barrier,
particularly as it relates to delivery fees and sticking to a budget in store.
Barriers Beyond Price. Beyond price, the most-commonly cited barrier to online grocery purchasing is trust.
While approximately one-third of online grocery shoppers cite the convenience aspects of saving time and not
having to carry heavy items as key reasons why they shop online (the ability to outsource those selection and
delivery tasks to someone else), nearly 40% of shoppers who do not currently buy groceries online are uneasy
about having someone else choose their fresh groceries for them.
Shoppers’ hesitations about allowing someone else to select their grocery items and the enjoyment of
the store experience and exploration is particularly acute among Boomers/Seniors and shoppers with no
kids at home. The conventional wisdom about being better able to pick merchandise than an employee is
generationally driven. Keep in mind that many Gen Y shoppers were not taught (or have not yet learned)
how to pick produce and other fresh products so the delivered product is often of higher quality than if
self-selected in a store.
Concerns over delivery, advanced planning required, and lack of available options round out the other
barriers:
One in four shoppers is concerned about food spoilage or damage during the shipping and delivery
process. It would seem the ability to get shoppers to trial the process via incentives would help allay some
of these concerns.
Nearly one in five shoppers are concerned they would have to plan too far in advance. Communication
and education about the turnaround time from order to delivery and flexibility in adjusting the order could
be helpful to overcome this disincentive. Finding a solution for households with kids at home to ease the
learning process of shifting habits to online can address the concern among these busy, multitasking
shoppers that even though buying groceries online seems appealing, they just can’t find the time to
overcome the hurdle to change shopping habits and save time on an ongoing basis.
Last but not least, approximately 15% of shoppers site lack of availability from local online grocers and/
or preferred grocery retailer as the barrier. As this nascent market evolves, competitive dynamics and
increased availability will erode this barrier.
- 20 -

© 2012 Kantar Retail
Kantar Retail Point of View
LOOKING FORWARD: Where Do We
Go From Here?
The message from shoppers is clear and proves Kantar Retail’s core hypothesis: The future of online grocery
shopping in the United States is a matter of when … not if. Shoppers with access to a full assortment, and homedelivery
options understand the value proposition. Others have come to understand the value of purchasing
frequently purchased shelf-stable items online. The only questions surrounding the evolution of online grocery
shopping is how quickly it will develop and how online grocery shopping, once more widely available, will fit into
shoppers’ grocery shopping routines as they optimize retailers and channels to fulfill their grocery shopping
needs. As this plays out in the marketplace, key planning premises for suppliers and retailers include:
1. Balance Shifts More Heavily to Online, but Bricks & Mortar Still Dominates
So what will the new balance between bricks and mortar and online look like as the momentum shifts? With the
caveat that it is always dangerous to project what the future will look like by asking shoppers to hypothesize how
their behavior may change IF they adopt new behaviors, the new balance of grocery shopping between store and
online is still weighted toward the majority of purchasing occurring in the physical store environment, with six in
10 shoppers stating that they would shift only a minority of their grocery shopping online (Figure 18).
Figure 18: Amount of Grocery Shopping Shoppers Would Shift Online If They Started Buying Groceries Online
39%
No Kids, Males 42%
11% 10%
Source: Compete Online Intelligence Survey, Spring 2012; Kantar Retail analysis
Kids 15%
Just a few items; would Buy most of my
still go to store for most groceries in stores and
groceries purchase specialty
items online
All online shoppers
Male 13%
Depends on my
schedule, but I would
prefer to purchase
groceries in store
- 21 -
7%
Shopping would be split
evenly between online
and in-store
Shopper segments significantly more likely than all shoppers to agree
15%
Females 17%
Depends on my
schedule, but I would
prefer to purchase
groceries online
Amount of Shopping Would Shift Online
Less More
13%
Buy most of my
groceries online and go
to the store for specialty
items

© 2012 Kantar Retail
- 22 -
LOOKING FORWARD: Where Do We Go From Here?
What’s most interesting about this is not the nearly two-thirds that remains more status quo, but rather
identifying who and what is driving the switch among the other one-third. In particular, females are more open
to the idea of moving the majority of their grocery shopping online.
While the majority of shopping may still occur in the physical store, the shift of a significant share of the
billions of dollars of grocery purchasing to online shopping cannot be overlooked in the quest to grow sales
and share.
2. New Value Proposition and Offering Incentives to Trial Needed to Overcome Today’s Barriers
The fundamental reason online grocery remains nascent in the United States is two-fold:
1. Retailer reluctance based on cost of the last mile, which is the driver of the “convenience premium” that
shoppers must pay for online delivery and leads to price being the top barrier for shoppers.
2. Getting shoppers to trial the service in order to dispel some of the other barriers, which are primarily
based on misconceptions.
Kantar Retail anticipates that retailer reluctance to changing their model because of not seeing an alternative
to charging delivery fees will change dramatically in the next 12 to 18 months—primarily with the evolution of
“click & collect” models. To date, arguments against the potential for success of online grocery retailing in the
United States have been based on a narrow interpretation about fulfillment that is limited to home delivery.
While shoppers still rate home delivery as the most convenient fulfillment model, other models have potential
to win over shoppers (Figure 19). Shoppers agree that the convenience of online ordering isn’t limited to home
delivery; there are other fulfillment options that are also viewed as very or somewhat convenient. Better than
three-quarters of shoppers who do not currently buy groceries online admit that it would be convenient to
have their groceries delivered to their home or to pick up their grocery order at the store without having to
actually go into the store.
Click & Collect is the future of online grocery shopping in the United States. It is already transforming other
markets around the world as retailers recognize that the problem with online grocery isn’t so much the
“click” part of the shopping and ordering process, it’s the “collect” fulfillment of the order that is economically
challenging—particularly when it means home delivery. Two retailers currently advancing the development of
Click & Collect models operate in France: Auchan and LeClerc are leading a rollout of “drive” formats, where
shoppers go to a dedicated location, either stand-alone or attached to a store, to “collect” their order.
Kantar Retail anticipates that retailer reluctance
to changing their model because of not seeing an
alternative to charging delivery fees will change
dramatically in the next 12 to 18 months—primarily
with the evolution of “click & collect” models.

© 2012 Kantar Retail
Figure 19: Assessment of Convenience of Online Grocery Shopping
(among shoppers who do not currently shop for groceries online)
Having my groceries delivered to my house
Picking up my pre-ordered groceries at the store,
curbside pickup
Picking up my pre-ordered groceries at the store, at a
designated area in parking lot
Placing my order online
Creating my shopping list online
Picking up my pre-ordered groceries at pick-up location
away from retailer's store
Picking up my pre-ordered groceries at the store, at
customer service desk, etc.
Using my mobile phone to manage my shopping list
Placing my order via my mobile phone
Source: Compete Online Intelligence Survey, Spring 2012; Kantar Retail analysis
In fact, in early September 2012 Peapod announced three pilot free-standing locations in the Chicago area
where shoppers can drive to pick-up their online orders; at least initially, shoppers must reside within 10
miles of the pick-up locations to be eligible to utilize the service. Ahold also is experimenting with Curbside
pick-up at Stop & Shop locations, and more regional grocers such as Harris Teeter are expanding tests.
The competitive dynamics that will unfold as more leading retailers look to innovate and elevate their value
proposition in the quest to win share in an ever-competitive marketplace will begin breaking down the second
reason why online is still nascent in the U.S. today: lack of availability and stimulating trial of the service to
dispel the non-price barriers.
There is most certainly work for retailers to do around improving the overall online shopping experience
and value proposition in order to dispel perceptions about product quality, shopping “experience,” potential
delivery issues, and the notion of “immediacy.” But what incentives will be most likely to get shoppers to try
online grocery shopping?
- 23 -
32%
30%
29%
26%
24%
20%
15%
12%
LOOKING FORWARD: Where Do We Go From Here?
46%
38%
37%
45%
46%
46%
48%
49%
53%
Very convenient Somewhat convenient Not at all convenient
37%
47%
51%
17%
23%
24%
25%
26%
27%
27%

Gen X and Y shoppers and households with kids at home are most likely to be receptive to incentives that
would encourage them to trial online grocery shopping (Figure 20). Across the board, a retailer gift card for
trialing the service is the most likely to influence a shift in behavior.
In general, short-term incentives that would encourage shoppers to try it once are the most appealing to
shoppers, while longer-term incentives that would help shoppers build an online grocery shopping routine are
less popular. Gen Y/Gen X shoppers are significantly more likely than average to be enticed by both short-term
and long-term incentives to try online grocery shopping. Taken with the fact that these young shoppers also
are more likely to be shopping online for groceries already, it is apparent that this generational group will lead
the move to grocery shopping online.
© 2012 Kantar Retail
- 24 -
LOOKING FORWARD: Where Do We Go From Here?
Figure 20: Incentives that Would Prompt Shoppers to Try Online Grocery Shopping
(% who say incentive would be “very” or “somewhat” likely to make them try online grocery shopping)
Note: Generational age ranges are approximate.
Source: Compete Online Intelligence Study, Spring 2012; Kantar Retail analysis
Total Gen Y Gen X Boomers Seniors
Sample size 2082 711 460 701 210
Shorter-term: try it once A retailer gift card for trialing the service 64% 74% 65% 60% 44%
A promotion to save a fixed amount on
your next online purchase (e.g., $10 on
basket over a minimum)
57% 65% 59% 53% 34%
No delivery/pickup charges for a fixed
number of orders (e.g., your first 5 orders)
56% 64% 58% 53% 39%
No delivery/pickup charges for fixed time
(e.g., 1 or 2 months)
56% 65% 57% 51% 35%
Longer-term: establish a routine Easy navigation of the website 53% 58% 55% 49% 40%
Automatic loading of the items you
recently purchased in the store into a
“favorites” list that would facilitate list
building
43% 52% 47% 37% 24%
Time-saving features such as integration
of online list-building with recipes or
circular
40% 51% 44% 33% 19%
In-store demo on how to order online and
set up account and first shopping list
35% 39% 39% 30% 28%
Membership program whereby pay an
annual fee vs. per-delivery fee
28% 35% 29% 23% 17%

3. Prepare for a World Where Habits and First-Mover Advantage Matter
As shoppers find the optimal balance between online and in-store grocery shopping, patterns will evolve and
retailers and suppliers must adjust their strategies and tactics to remain relevant. Critical among these skills
is understanding list formation in order to influence shopper behavior both online and in-store.
Lists start with categories purchased. As noted earlier, all categories are not created equal; fresh categories
account for a much larger proportion of the total basket online. In fact, for one multi-channel grocery store
player, each of the top three selling categories online represent more than double the share of sales from the
top three selling categories in the bricks and mortar store (Figure 21). As online assortment expands and
shoppers develop their own category preferences by trip type, monitoring this balance between the online and
in-store basket will be critical to developing comprehensive shopper marketing programs.
It is critical to begin understanding the dynamics of your category in online grocery as first-mover advantage
matters. When many rankings and site visibility hinge on “best sellers,” breaking into shoppers’ consideration
set is an arduous task. Online habits are also quite “sticky”—shoppers who purchase a number of other
categories are more likely to expand their category consideration set and once items make it onto the list, it
is very hard to get shoppers’ attention. When all it takes is four clicks for many online grocery shoppers to
complete their order, there is not much opportunity to interrupt, no less influence, the purchase decision.
Each of the top three
selling categories
online are more than
double the sales of
the top 3 selling
categories at the
bricks & mortar store
© 2012 Kantar Retail
Figure 21: Top Categories: ‘Fresh’ Online vs. ‘Traditional Grocery’ for Bricks & Mortar
#1
#2
#3
#4
#5
Source: Kantar Retail ShopperGenetics®, 52 weeks ending 3/2012
Online Grocer B&M Retailer #1
Fresh Market Meat
Fresh Market Produce
Fruits
Fresh Market Produce
Vegetables
- 25 -
LOOKING FORWARD: Where Do We Go From Here?
% of Total Sales by Category
Milk
B&M Retailer #2
(Premium)
7.8% 3.3% 3.9%
Bread
Fresh Produce
6.0% 2.8% 2.6%
5.9% 2.7% 2.5%
Soda Potato Chips Coffee
3.5% 2.5% 2.3%
Milk Cereal Canned Vegetables
3.4% 2.5% 1.8%
Milk
Cheese Yogurt

Manufacturers will need to think carefully about how their products make it onto shoppers’ lists online and
how baskets are built. This is an area today that is not well understood in the preparation for the store trip, no
less online. Understanding this process and the key factors influencing the shopper at this point of decision
will be a critical skill set that must be developed.
Among the factors that affect list formation, manufacturers have varying degrees of influence. Fortunately,
there are a few key online list influencers that shoppers rate as relatively important and that manufacturers
have some ability to influence (Figure 22).
85%
80%
75%
70%
65%
60%
55%
50%
© 2012 Kantar Retail
Recently
purchased items
Items from
replenishment
list I keep
Figure 22: Influencers of List Formation for Online Groceries
Ingredient for
specific recipe
Ability to search to
meet minimum
purchase requirement
Item featured as bestseller
Source: Compete Online Intelligence Survey, Spring 2012; Kantar Retail analysis
Manufacturers will need to think carefully about how
their products make it onto shoppers’ lists online and
how baskets are built.
- 26 -
LOOKING FORWARD: Where Do We Go From Here?
Brands/items I am loyal to
Nutritional attributes of items
Item requested by
Customer
reviews
other HH members
Items advertised on site
Suggestions based on customers
who bought similar items
Featured as new item
Item listed 1 st /at top of page
Items for which there are
deals/coupons/promos
Average
=69%
Manufacturers' Ability to Influence
Low High

© 2012 Kantar Retail
- 27 -
LOOKING FORWARD: Where Do We Go From Here?
The availability of deals and promotional prices are the biggest influence on what makes it onto the list
online, with better than 80% of online grocery shoppers reporting that deals/promotional prices are very
or somewhat important. This also is the factor that manufacturers have the greatest ability to influence.
Shoppers’ purchase history online is the second-biggest influencer on list formation. Here the challenge
remains getting in the basket in the first place, but once online, a higher likelihood of remaining on the list.
Shoppers do not check their brand loyalty at the door when they shop for groceries online: brand loyalty is
an important factor in online list formation, and so manufacturers’ efforts in this area will have benefits
both in the store and online.
As more and more U.S. shoppers begin to migrate some of their grocery shopping online, here are a
few key considerations:
Online grocery shoppers are most likely to be older Gen Y/younger Gen X shoppers. As these
shoppers enter the household formation life stage and establish shopping routines, online
grocery shopping WILL become a more mainstream shopping activity.
“Convenience” means different things to different people. One of the reasons online shopping in
general has taken off is because it is able to meet these disparate definitions of “convenience,”
and online grocery shopping is no different. Innovation in “click & collect” models to manage the
cost of the last mile will revolutionize the landscape.
While price is the biggest perceived barrier to adoption of online grocery shopping, it also is
one of the most common reasons cited for buying groceries online. Online grocery shoppers
recognize the myriad ways that online grocery shopping saves them money and provides value.
Retailers’ ability to communicate those nuances to offline grocery shoppers will be vital to the
proliferation of online grocery shopping.
Even if shoppers have to pay a small premium for the convenience of online grocery shopping, it
is important not to underestimate the value of saving time, especially as technology “speeds up”
shoppers’ everyday lives. Site navigation and speed of checkout are critical enablers here.
Key questions/checklist: Do you understand how your category:
9 Is shopped for online?
9 Is added to the list: how and when?
9 Indexes in the online vs. in-store basket?

KantarRetailiQ.com / KantarRetailiQ.eu / KantarRetailiQ.cn
KantarRetail.com