REPORT: U.S a laggard in fast-growing online grocery

REPORT: U.S a laggard in fast-growing online grocery featured image

“While online grocery shopping is booming worldwide, the U.S. lags behind countries like the U.K., South Korea and France, where the practice is more established, according to a report issued Wednesday by Dunnhumby.

The study, which tracked consumer habits of 7 million shoppers in 14 countries in Europe, Asia and the Americas, showed online grocery shopping in emerging and nascent markets was growing by 97% and 98%, respectively, year-on-year. Dunnhumby classifies U.S. as an emerging market, along with China, Slovakia, Czech Republic, Poland, Ireland, Japan and South Africa, with online sales penetration of 0.9% in 2014. Established markets like the U.K., France and South Korea have penetration of 4.8%, and year-on-year growth of 31%, dunnhumby said.

According to the report, the physical store still plays an important role for U.S. shoppers, particularly in their acceptance of new products. “While there is strong multichannel growth throughout the world, there are particular challenges in the U.S. preventing the market from reaching the same level of development as elsewhere,” said Julian Highley, global director of customer knowledge at Dunnhumby, said in a release. “In smaller cities, it’s likely that ‘click and collect’ services will be the dominant method for online shopping. Major market locations like New York City, Chicago and Los Angeles have started to roll out ‘click and deliver’ grocery services with some success.”

The report also noted differences in shopping behavior online and in physical stores, saying the path to purchase changes in the absence of in-store stimulus. The three categories with the highest share of online sales — frozen meat, baby food and baby care, and canned food — have an average annual online growth rate of 21%, Dunnhumby added. Across established, emerging and nascent markets, baby food and baby care products appear in the top three sales categories, while baby milk is by far the leading product for new online shoppers, indexing at almost twice the rate as the second most popular product among new shoppers, water.

Dunnhumby, with U.S. offices based in Cincinnati, is owned in part by Kroger.

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