New study shows huge jump in adoption rates, Walmart numbers soar
The growth of online grocery ordering has been a huge ongoing story, and last week, we found out it may be even bigger than we thought. Coresight Research released their 2019 U.S. Online Grocery Survey last Tuesday, and the study showed a massive 60% year-over-year jump in adoption rates between 2018 and 2019.
Coresight’s study found 36.8% of the 1,888 internet-using adults polled, purchased groceries online in the previous 12 months, jumping from just 23.1% in 2018. In real numbers, that translates to an increase of about 35 million customers – going from about 58 million customers in 2018 to a staggering 93 million customers in 2019.
Sitting at the epicenter of this growth curve is mega retailer Walmart, who experienced their biggest year-over-year 1st quarter sales gain in 9 years, growing total revenue from $122.7 billion to $123.9 billion. This boost was, in large part, due to grocery and E-commerce — with online sales surging by 37%. That E-commerce increase was enough to account for the entire boost and then some, contributing over $1.7 billion to the total.
What makes this story so interesting is the Q1 timing. After Amazon’s announcement of 1-day standard delivery for Prime Members a few weeks ago, Walmart was quick to respond. Walmart’s NextDay delivery is free for eligible orders over $35 — a move designed to counter Amazon’s membership-based Prime model. Just last week, they began rolling out their NextDay delivery program in Phoenix and Las Vegas, with Southern California to follow in the next few days. Newly announced plans call for the NextDay delivery program to be available for 75% of the U.S. population by the end of 2019.
All of this stands to have a tremendous impact on Walmart’s online sales growth, and all of it happened well after the conclusion of the study.
Per the same Coresight Research study mentioned above, Walmart is quickly gaining ground on market leader Amazon in the online grocery space. 62.5% of consumers who purchased groceries online in the last 12 months did so through Amazon, while 37.4% purchased through Walmart. Year-over-year however, Amazon grew in this space at a 3% clip, while Walmart’s comparative scores saw a 12% gain. One has to imagine the introduction of free NextDay delivery will be another boon for the retailer and may bump that number up even more.
These 1-day delivery programs from the market leaders and the growing popularity of the buy online, pickup in the store model, will surely catalyze exponential growth in adoption rates for online grocery sales through the rest of 2019 and 2020. This 35 million customer year-over-year bump from 2018 to 2019 may very well be dwarfed by what we see next year.
In the meantime, it would be a good idea to continue to button up your E-commerce game and explore your online shopper marketing options with different retailers. You want to ensure you’re getting your share of the pie as those billions of dollars continue to move online.
What do you think about the exponential growth of online grocery shopping? Have we seen the most significant jump, or is the biggest change yet to come? We’d love to hear what you think. Sound off on social media now and join the conversation.