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.

RELATED: Online grocery shopping doubled in 2015

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.

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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.

RELATED: Kroger expands click-and-collect

"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.