Video thumbnail for youtube video Goodbye, checkout lines: QThru launches app to make shopping easierThis might be the explanation you’ve been waiting for if you’ve been wondering why Amazon and others are willing to invest millions in selling groceries online.

In a special report on Business Insider, a lengthy slideshow recounts how consumer behavior is shifting from offline to online, and how that’s affecting the retail industry. The high-level summary is that while physical retailers are shuttering stores, online sales are growing.

But what’s the deal with groceries?

Two slides, in particular, explain why there’s a sudden surge of interest. Recent entrants into the space include grocery delivery services, like Amazon Fresh and Instacart, but also a host of online food delivery services exist, like Munchery, Caviar, Eat24, Bitesquad, Postmates.

In short, food sales are an area worth investing in because so little of it takes place online today. If any of these companies are successful at shifting consumer habits just a little bit, and can get the economics to work, it could represent a huge opportunity.

In the first slide, we see how much money is currently being spent offline vs. online in the U.S., and online amounts to just peanuts:

BI_groceries online

In the second slide, we see how groceries stack up against other categories, like furniture, clothing or health. Those segments have already started shifting online. The food and beverage category is the last segment that remains nearly untouched.

BI_groceries online 2

Comments

  • marjorierhosmer

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  • Graham O’Dwyer

    That might be the
    situation in the US but here in the UK online food shopping is huge! All of the
    major supermarket chains have an online presence and their delivery vans are
    everywhere. The last major supermarket holding out against this trend, reported
    a massive decline in profits last year. Analysts put all of the decline down to
    a lack of online shopping strategy. Most UK retailers are now extending their
    online services to not only delivery during the day but to evenings and weekends – they even have “click and collect” for people who
    work irregular hours.
    I am constantly amazed that this is not a
    “thing” in the US! I cannot remember the last time I went to a
    supermarket for anything other than milk or wine. The “weekly
    shop” disappeared a few years ago!

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