Brick-and-mortar grocers could be growth behind online grocery sales

Despite the well-publicized failures of pure-play grocers such as Webvan, Streamline.com and others, the online grocery sector is alive, kicking and poised for growth as major brick-and-mortar grocers move aggressively to take up the slack, according to new data from Forrester Research. It’s a market that will grow slowly over the next few years, developing from a relatively small base of early adopters – only about 4.5 million or 8% of online users bought groceries on the web last year. But it’s expected to pick up steam as grocery services mature and more households have broadband access, reaching an estimated 14.1 million households by 2006.

Online sales can lift the revenues of a brick-and-mortar grocer by 3%, estimates Forrester. One important key is that the online grocery buyer spends more per trip than store shoppers. Shoppers who buy online at least once a month spend 75% of their grocery dollars online, says Forrester, bypassing other venues such as discount mass merchants that also vie for the grocery dollar.

By contrast, offline-only supermarket customers spend 46% of their grocery dollars at traditional supermarkets. The additional spending from an online shopper ordering at least once a month could be $1,591 per year, estimates Forrester. To build on the relatively small base of 1.1 million shoppers who regularly buy groceries online, grocers should leverage the web for purchase data that makes it easier for first-timers to get online and more rewarding for regulars to go back with loyalty-based programs such as personalized online shopping lists and individually-targeted promotions, Forrester says.