The Evolution and Rapid Growth of Online Grocery Delivery in the United States
10-minute grocery delivery is coming to the US as about 150 million people are opting for online grocery delivery as a convenient alternative. It is forecasted that online grocery delivery services are expected to surpass the 47 billion dollar threshold by 2025. Ultrafast delivery has expanded rapidly across European cities in recent months, and the same model appears poised to spread across the U.S. as well.
Market Trends and Record-Breaking Sales
Despite the slow reopening of the U.S. economy, online grocery shopping is continuing to reach ever-higher numbers as Americans seem to be in no rush to return to the store. U.S. online grocery sales hit a record $7.2 billion in June, up 9% over May, as 45.6 million households turned to online grocery pickup and delivery services for a larger portion of their grocery needs. This figure is higher than the $4 billion seen in March 2020, when the U.S. first went under coronavirus lockdowns.
As documented by industry research, the growth of monthly sales follows this trajectory:
- March 2020: $4 billion
- April 2020: $5.3 billion
- May 2020: $6.6 billion
- June 2020: $7.2 billion (Record high)
The Emergence of Ultrafast 10-Minute Delivery
Gorillas, a Germany-based startup that provides grocery delivery in 10 minutes or less, is launching in New York City on May 30. The company will begin service in parts of Brooklyn, including the Bushwick, Boerum Hill and Carroll Gardens neighborhoods, and expand to Manhattan in June. Founded just last May, Gorillas operates “micro warehouses” that serve a tight delivery radius and rely on a fleet of couriers riding electric bikes. Now, Gorillas aims to test the market with its 10-minute offering and plans to launch delivery in other major U.S. cities by the end of the summer.
Major Industry Shifts and Key Players
Regarding established giants, Amazon is rolling out the service to the rest of the US as it prepares to open more supermarkets next year. Shoppers will be eligible for the offering anywhere the company operates its Amazon Fresh service. In contrast, Instacart and Whole Foods are splitting up for good. Starting Thursday, Instacart said it will begin separating itself from Whole Foods and eventually no longer let its customers order from the Amazon-owned grocer through its app or website.
Why Choose Grocery Delivery Services?
Convenience, efficiency, and quality of life are of paramount importance. Grocery delivery services tick all these boxes by transforming the traditional shopping experience into a more streamlined process:
- Time-Saving: Online grocery shopping frees up these hours for other essential activities or leisure.
- Stress Reduction: Avoiding crowded stores, traffic jams, and the struggle to find parking can substantially reduce daily stress levels.
- Accessibility: For those who have mobility issues, live far from a grocery store, or don’t have access to transportation, online grocery delivery can be a lifeline.
- Flexibility: Many services offer same-day delivery, while others allow you to schedule deliveries in advance.
Market Competition and Future Outlook
The increased choice in online grocery providers has made it more difficult for services to attract repeat usage. As of June, the likelihood of a shopper to use a specific online grocery service again within the next 30 days now sits at 57%. However, some experts see the potential for a new e-grocery channel that serves the impulse purchases and small orders that grocery delivery companies have traditionally struggled to fulfill.
