Unexpected Winner of Online Shopping: Groceries

Increasingly, Americans shop online for the holidays. I’m one of them, make no mistake; my mail lady tends to hate Christmastime at my house because it means Amazon boxes like no tomorrow. One research firm is coming around to my way of thinking, and in a direction even I didn’t expect. Fung Global Retail & Technology (FGRT) recently offered a report projecting that online grocery retail would spike 50 percent over what it was this time last year.

The FGRT study is expecting gains thanks in large part to a growing number of firms that offer the service in the first place. With Amazon landing Whole Foods, and Walmart and Kroger stepping up operations—among others like Michigan mainstay Meijer—a lot more people have the option to buy groceries online and pick them up later, or have them delivered, than ever before.

While this is still very much a regional phenomenon—many places don’t even have the option to place such orders yet—those that do are taking more advantage of it, suggesting that it’s likely only a matter of time before it catches on all over. With Walmart expecting 1,100 locations to have such service by the end of 2017, and expecting the number to double next year, it’s catching on, if slowly.

Walmart’s not alone here; Kroger has better than doubled its collection points, and saw digital revenues up 126 percent in the most recent quarter. Amazon and Whole Foods, naturally, are contributing too; it took Amazon less than a month to sell $1 million in Whole Foods-branded products after it took over.

The same points that contribute to the growth of regular online sales are likely fueling some of this as well; why would people want to push a wheeled basket through a store full of people trying to do likewise—some occasionally stopping to block an aisle by talking to someone else—when they could just click a few mouse clicks at home and pick it up later, or even have it delivered.

It’s clear that online and mobile are gaining when it comes to grocery shopping. And why not? It’s gaining most everywhere else. This puts a particular potential premium on mobile payments as a way to pay in the midst of that online shopping.