E-Commerce and the Online Grocery Revolution

Posted on November 30, 2018

Thanksgiving reminded me of something I had forgotten: I hate going to the grocery store. It’s too crowded, there are 17 different brands of items when I only want one specific brand, there are boy-scouts out front who try to make me buy something, and an old man always brings more than ten items to the express lane. I get it, these are premium first world problems. However, the days of going into a grocery store seem numbered due to the rise of online grocery, and that has me cheering to the heavens.

Online grocery sales tripled between 2013 and 2018. They are expected to quadruple by 2023. More and more markets are realizing the potential of this trend, and adapting their businesses to meet the demand. Kroger has announced a grocery pickup service, Walmart is rolling out grocery delivery, and other stores seem to be on the way. Services like Doordash allow you to press a button and have someone pick up groceries for you.

This explains the motivation behind Amazon acquiring Whole Foods — they want to corner the grocery market too. Walmart and Amazon account for a combined 28 percent of online grocery sales. That share is likely to continue to grow. We’ve discussed how over the Black Friday/Cyber Monday weekend, online shopping reached unprecedented levels and is on pace to continually surpass brick-and-mortar purchases. Why would grocery not adhere to that general trend?

People enjoy the convenience. People hate inconvenience. If a service allows me to purchase groceries online, and then have them available at my door, or for easy pickup, I’m going to do it. The less time I have to spend in a Walmart, the better. It seems that the population of grocery buyers is like-minded. There will always be a place for brick-and-mortar stores — some people can’t or won’t change their habits. But I would not be surprised to see Supercenters becoming Distribution Centers.

The days of going to market will be reserved for nostalgia-seekers and the elderly. A shopping cart will be in the top right corner, not rolling down the parking lot. A greeter won’t be a retiree, it’ll be a clip art paper clip. Your kid won’t get a smiley-face sticker when they leave the store, you’ll get a smiley-face gif after you checkout. There will be big changes.

The implications here actually straddle a chasm of helpful and hurtful. On one hand, we may see worker layoffs as stores become more and more automated. On the other hand, we’ll likely see a reduction of plastic bag usage, as items won’t need to be carried out of the store, but rather dropped into your car. Shopping will be more and more convenient, but this may see mom-and-pop stores collapse. These will be things we grapple with going forward.

Going to the grocery store is something I’ve hated for a long time, but it appears that I may be relieved soon. How we react to this development in the years to come will be interesting, as technology continues to propel a rapidly changing world. Things we once took for granted, and loved or hated, will become relics of the past — happy or horror stories to tell to kids.