An online grocer is either a brick-and-mortar supermarket or

grocery store A grocery store ( AE), grocery shop ( BE) or simply grocery is a store that primarily retails a general range of food products, which may be fresh or packaged. In everyday U.S. usage, however, "grocery store" is a synonym for supermarket, a ...

that allows online ordering, or a standalone

e-commerce E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain managem ...

service that includes grocery items. There is usually a delivery charge for this service. Brick-and-mortar supermarkets that have built internet channels to better service their clients are known as online grocers. Online grocery delivery services are available throughout Europe, Asia and North America, mostly in urban centers. The online ordering is done through

website A website (also written as a web site) is a collection of web pages and related content that is identified by a common domain name and published on at least one web server. Examples of notable websites are Google, Facebook, Amazon, and Wi ...

s or

mobile app A mobile application or app is a computer program or software application designed to run on a mobile device such as a phone, tablet, or watch. Mobile applications often stand in contrast to desktop applications which are designed to run on d ...

s. The

COVID-19 pandemic The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identi ...

greatly accelerated the growth of online grocers, and in the first few months of the pandemics online grocery shopping increased by 300%. In addition, first-time online grocery shoppers accounted for 41% of online grocery shoppers. The epidemic of COVID-19 has hastened the uptake of online grocery shopping. Pre-COVID-19 food shopping activity accounted for 9% of the market, but 63 percent of consumers worldwide purchased more groceries online after the outbreak than they did before they were socially isolated.

In-store pickup

Save-On-Foods online order pickup fridges

For brick-and-mortar stores that have online ordering, customers can place orders online and pick up their ready orders in the store on their way home. In-store pickup—sometimes termed "click & collect"—is typically offered for same-day shopping. It is usually less expensive than delivery, and can be done at a time of the customer's choosing. This option is popular in rural areas. It is also useful for customers living outside of the store's local delivery area.

Local delivery

Most local online grocers have their own drivers. The most common type of personal delivery involves storing grocery inventory in a

warehouse A warehouse is a building for storing goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial parks on the outskirts of cities ...

to deliver to customers once orders are placed. Another type of personal delivery which is less common is based on just-in-time business in which there is no warehouse or inventory. In this type of delivery, customers place orders for next-day delivery. The online grocer shops for the groceries on the morning of the delivery day. Some grocery fulfilment centres are set up as dark stores. Online-only grocers typically have

warehouses A warehouse is a building for storing goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial parks on the outskirts of cities, town ...

or distribution centers nearby, to allow local shipping of refrigerated items. Online grocers with a large regional or national delivery area may ship groceries using courier services. If the order contains cold or frozen items, this involves "

flash freezing In physics and chemistry, flash freezing is the process whereby objects are frozen in just a few hours by subjecting them to cryogenic temperatures, or through direct contact with liquid nitrogen at . It is commonly used in the food industry. Fl ...

" the goods and pack them into special shipping containers. Companies have experimented with automated delivery modes including drone delivery and

robots "\n\n\n\n\nThe robots exclusion standard, also known as the robots exclusion protocol or simply robots.txt, is a standard used by websites to indicate to visiting web crawlers and other web robots which portions of the site they are allowed to visi ...

. For instance, in Fall 2016

Washington, D.C. ) , image_skyline = , image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan, ...

approved a trial run of rolling delivery drones produced by

Starship Technologies Starship Technologies is an Estonian company developing autonomous delivery vehicles. The company is headquartered in San Francisco, California, with engineering operations in Tallinn, Estonia and in Helsinki, Finland. Starship also has office ...

. The earthbound robots are similar to wheeled coolers and carry around 40 pounds of groceries.

Platforms

The online grocer technology platform could be developed in-house, or a third party's platform could be re-used and customized to reflect the company brand and provide unique features. In some cases, all management and support tasks are being outsourced to the platform provider.

Market size and share

In the United States, as of 2017,

Amazon.com Amazon.com, Inc. ( ) is an American multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It has been referred to as "one of the most influential econo ...

sold $2 billion worth of groceries online. It had the largest market share, 18%, followed by

Walmart Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores from the United States, headquarter ...

. Amazon has acquired

Whole Foods Market Whole Foods Market IP, Inc., a subsidiary of Amazon, is an upscale American multinational supermarket chain headquartered in Austin, Texas, which sells products free from hydrogenated fats and artificial colors, flavors, and preservatives. A US ...

to help accelerate their growth efforts in the online grocery sector. Other companies with substantial market share in the US are Target and

Instacart Instacart is an American company that operates a grocery delivery and pick-up service in the United States and Canada. The company offers its services via a website and mobile app. The service allows customers to order groceries from participatin ...

. The value of the US online grocery market has grown from $12 billion in 2016 to $26 billion in 2018 and it has plenty of room to grow, given that the size of the overall grocery market was $632 billion in 2018 according to IBISWorld. Online grocery shopping has grown substantially during the

Impact on the environment

Online grocery stores may allow facilitating

local food Local food is food that is produced within a short distance of where it is consumed, often accompanied by a social structure and supply chain different from the large-scale supermarket system. Local food (or "locavore") movements aim to con ...

which may reduce the environmental impact of food transport. Small-scale farmers have been embracing digital technologies as a way to directly sell produce, and

community-supported agriculture Community-supported agriculture (CSA model) or cropsharing is a system that connects producers and consumers within the food system closer by allowing the consumer to subscribe to the harvest of a certain farm or group of farms. It is an alterna ...

and direct-sell delivery systems are on the rise during the coronavirus pandemic. Furthermore, weekly grocery deliveries can be a better choice than individual trips to a store. Some online grocery stores have a goal of supporting the production and sale of fresh, organic, locally grown, sustainable foods.

Data and online grocers

The biggest advantage that online grocers have vis-a-vis brick-and-mortar store is more accurate data. Online grocers can use AI and machine-learning models to provide a more

personalized Personalization (broadly known as customization) consists of tailoring a service or a product to accommodate specific individuals, sometimes tied to groups or segments of individuals. A wide variety of organizations use personalization to improv ...

experience for their customers. There are four main ways to utilize data for online grocers: creating smart shopping lists, personalizing discounts, personalizing the way items are shown to users, and providing contextualized recommendations. All these are intended to increase up-selling and

cross-selling Cross-selling is a sales technique involving the selling of an additional product or service to an existing customer. In practice, businesses define cross-selling in many different ways. Elements that might influence the definition might include ...

options as well as increase the customer's lifetime value.

References

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