Click-and-collect boosts online grocery to $24B in 2017

Image: Walmart

Online grocery is expected to continue its upward trend, becoming a $24 billion industry in 2017, up from $17 billion in 2016. The boom is attributed to an increase in click-and-collect options from retailers such as Kroger and Walmart, which are helping to create a shift from buying small amounts online to full baskets.

The expansion of click-and-collect is creating a shift, helping online to grow more than 2 percent in 2017, up from about 1.4 percent this year.

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Currently, about one-third of U.S. consumers are already shopping online for groceries, up 63 percent from 2014, according to a Fung Global Retail & Technology report recently published. But sales are not proportionate because those shoppers tend to buy specific items only online and still don't use digital stores as much as physical stores.

Although Amazon currently dominates the digital grocery space, the tide is shifting due to retailers such as Walmart and Kroger offering click-and-collect to shoppers. In Q2, Walmart and Kroger each had click-and-collect in about 400 locations.

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"Given the already substantial consumer participation rates, there look to be opportunities to convert the large body of occasional, small-basket online shoppers into shoppers who conduct their main grocery shops online," said Deborah Weinswig, an analyst with Fung Global Retail & Technology.