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Who are the key players in the grocery e-commerce space? I need an overview of the grocery e-commerce space, focused on size, growth, and key players. Should include both delivery and pick-up services, as well as 3rd party vendors (instacart) and should only include traditional grocery stores (no amazon, drug, club, or walmart/target)
With consumers expected to spend $18 billion shopping online by 2020, the grocery e-commerce market is in a definite boom; key traditional players include companies like PeaPod and FreshDirect. Although you requested that our research focus on traditional grocery stores, it is impossible not to mention stores like Amazon or Walmart since they are direct competitors and much of the market data is intertwined.
OVERVIEW OF ONLINE SHOPPING
In 2015, American consumers spent $7 billion shopping online; online sales are projected to reach $18 billion by 2020. A CNBC article predicts online shopping to hold 20% of the market by 2015. The Motley Fool published an article summarizing the key online grocery players: "...[T]he grocery store, such as Safeway, the mass merchant like Wal-Mart, and the category specialist such as FreshDirect."
According to Statisa.com, more consumers preferred to purchase the following items online versus in-store: Books (68%); electronics (67%); office supplies (51%); and sporting goods (44%). Only 8% of consumers would rather buy grocery items online than in person. The following percentages illustrate how many consumers would prefer to purchase various household items online: Pet supplies (34%); household goods (29%); clothes and apparel (24%); and consumer packaged goods (23%).
A 2015 A.T. Kearney study illustrated that consumers prefer to purchase personal and packaged products online, but would rather buy food items in stores. In the last six months, 53% of people surveyed bought personal care items online; 52% bought beauty products; 31% bought purchased food; and 19% bought baby food. Only 14% of consumers bought fresh meat, seafood, or produce online; 13% bought fresh prepared meals; and 7% bought other fresh foods. A CNBC article states, "[C]anned goods, condiments, spices, and other so-called center of store products will likely shift faster to online than traditionally perimeter items such as fresh produce and meats."
TRADITIONAL RETAILERS & SPECIALTY GROCERS
A Neilson industry report illustrates a positive trend in annual growth rates for traditional retailers: Drug stores (+6%); small supermarkets (+5%); and traditional stores (+4%). Large supermarkets and hypermarkets show a growth rate of only 2% each. Supermarkets.com expects e-commerce "to double it's e-commerce sales by 2020," specifically mentioning stores including: Peapod; Giant-Carlisle; Giant-Landover; and Stop & Shop.
When online marketing made its debut in the 1990s, Publix was a leading industry player; today it is overshadowed by stores like Kroger, Amazon, and Walmart. Currently, the leading American online grocer is Peapod, which "has grown from a small, family-run shopping and delivery service in Illinois to America's leading Internet grocer, delivering more than 23 million orders across 24 U.S. markets." Ahold Delhaize owns the company, and Peapod works with the following stores: Stop & Shop; Giant Food Stores: and Giant Food.
Specialty grocers also show online promise: Robeco published a report that sees specialty grocers like Sprouts Farmers Market and The Fresh Market establishing a greater online advantage for themselves than stores like Wal-Mart, Kroger, Safeway, Tesco, and Ahold.
DELIVERY COMPANIES
An article on Slice Intelligence states that delivery services from stores like FreshDirect and Peapod grew "between 12% and 35% in 2015," which pales in comparison to Instacart's massive growth rate of 168%. In 2014, before Instacart exploded into the market, the leading online grocer competitors were Fresh Direct, Google Shopping Express, Safeway, Amazon Fresh, and Peapod. FreshDirect's 35% market share, however, trumps Instacart's 32%. Other online delivery companies include Google Shopping Express.
CONCLUSION
The e-commerce industry consists of big companies, traditional retailers, specialty grocers, and delivery companies. The growth rate for traditional and specialty stores has been higher than megastores like Amazon or Walmart. Key market players include PeaPod and FreshDirect.