What’s the Future of Online Grocery Shopping?

What’s the Future of Online Grocery Shopping?

The conventional wisdom has been that the pandemic will spark a widespread and permanent shift in American habits from analog to digital. But what about that most basic habit — grocery shopping?

Americans spend more on groceries than almost anything else, and how we buy food is considered a finger in the wind to assess the future of our shopping habits. Right now, the direction is … unclear.

I have been scouring data on online grocery shopping in the U.S., and I will be humble and say that I don’t have a clear picture.

Americans are definitely buying far more groceries online than we were in 2019, but in some notable categories such as fresh and frozen foods, the growth of online sales is much lower than it was before the virus started to spread widely in the U.S. In some recent months, online grocery sales have dropped or barely budged from the prior year.

It’s inescapable that digital sales will keep increasing as a share of U.S. spending, including for groceries. But digital transformation is often not a straight march up a mountain but more of an uneven climb up, down and sideways. And grocery buying has been on a particularly jagged trajectory.

My wishy-washy analysis is that Americans haven’t fallen head over heels for buying bananas over the internet, but we aren’t rejecting it, either.

Along with the figures that showed e-commerce lost ground last year to shopping in person, the muddy picture of online groceries shows that human behavior may be too complicated for simple explanations.

Here’s where things appear to stand: Before 2020, Americans weren’t that jazzed about having groceries delivered to our doors. By choice or necessity, almost all U.S. grocery buying happened in stores.

The amount of grocery purchases made online has increased to somewhere around 7 to 15 percent from perhaps 3 or 4 percent of total sales in 2019. (Analysts told me that the data for the roughly $1 trillion of yearly U.S. grocery sales should be taken with grains of salt.)

Grocery delivery to our door is still relatively dinky, but ordering groceries online for pickup at the store took hold during the pandemic and is sticking. Maybe.

There’s been some backsliding on online ordering, however, and the vast majority of Americans are still shopping for groceries the old-fashioned way. It’s tough to assess whether and how much the online-grocery habit might stick.

A report by Forrester and IRI found that in many categories of products purchased in supermarkets, online growth is lower than it was in January 2020. In closely watched shopper surveys by the research firm Bricks Meets Clicks, online grocery sales have been growing unevenly recently.

It’s not a surprise that online grocery sales couldn’t keep increasing as quickly as they did when we were internet panic-shopping in 2020. But with the sales still relatively small, it’s not a sign of passionate digital love that the numbers haven’t been going up quickly or steadily. (Rising costs for everything also make it tricky to compare 2022 shopping with that in 2019.)

Even experts can’t confidently say how quickly Americans will adopt the online-grocery habit or how much of our shopping may wind up virtual. “The numbers are too small to draw permanent conclusions,” said Jason Goldberg, the chief commerce strategy officer at the advertising giant Publicis.

He told me that in his conversations with industry leaders, the big supermarket chains are betting that online grocery shopping will become a bigger part of our lives but that everyone is also constantly second-guessing their beliefs.

For now at least, supermarkets including Walmart, Target and Kroger are putting money into expanding options for people to pick up groceries that they purchased online. That has been Americans’ go-to method for digital grocery shopping.

Big supermarkets are also redesigning stores to make it easier for their staff to assemble online orders, and some have invested in more Amazon-like automated mini warehouses.

Goldberg said that grocery sellers didn’t want to be left behind if and when more of our shopping happens over the internet. But they are also anxious, partly because selling online adds costs in an already profit-challenged sector.

Even the relatively small amount of grocery shopping online now has profoundly changed the experiences for many shoppers, some of the millions of Americans who work in grocery stores and those anxious sellers.

Still, the difficulty of analyzing our online-grocery present and future calls for humility about the durability of our adaptations to the coronavirus. When people make bold statements about what will happen in shopping, work or the economy, try to remember that no one knows anything for sure.

Maybe in your own life, you’re not sure how you want to shop for food. I’m eager to hear about your experiences at [email protected]. Please put “Groceries” in the subject line.

Are you having restaurant food or groceries delivered? Brian X. Chen, the consumer technology columnist for The New York Times, suggests ways to assess the true cost of your order, including fees that sometimes are not clearly disclosed.

(Please note that bills from delivery apps might vary, depending on where you live. Some U.S. cities mandate that delivery apps itemize their fees.)

Have you ever wondered why it cost $50 to get a pepperoni pizza delivered via DoorDash or why that Instacart bill seemed astronomically high? It’s not just because inflation has increased food prices. Online delivery apps and the restaurants that rely on them also find ways to stuff fees into your order that are not always transparent.

Consider an order that I placed for a delivery of two Subway sandwiches. In a study I conducted for a past column, Uber Eats charged me $25.25, including the cost of the meal, a service fee, delivery charge and surcharge for placing a small order — a 91 percent markup compared with buying those sandwiches in person.

In a separate experiment, I found that some restaurants charged more for some menu items when you ordered through delivery apps. The Family Feast value meal at Panda Express cost $39 in the restaurant, but the same item cost $47.10 if you ordered it through DoorDash, Grubhub or Uber Eats. That was before paying additional service fees. Restaurants sometimes inflate menu prices to cover the commissions they pay to the delivery apps.

The next time that you’re deciding whether to order delivery, be aware of what it might cost you. Take a close look at the bill and compare the cost of items in the app with what those menu items cost on a restaurant’s website or at the grocery store.

The true cost of using a delivery app might compel you to use the phone to order takeout and pick up dinner yourself, or you might decide the delivery is worth it. Either way, you’ll be better informed.

  • War is a proving ground for face-scanning technology: My colleague Kashmir Hill reports that software from Clearview AI, which promises to identify people from images of their faces, has been used to identify dead soldiers in the war in Ukraine to notify their families. But she also notes that facial-recognition companies could be taking advantage of a crisis as a sales opportunity, and that mistakes in identifying people could have deadly consequences in a war zone.

  • Problems for that, uh, eyeball-scanning company. It sounds weird, but a start-up called Worldcoin promised to give people in low-income countries cryptocurrency and scan their eyes to try to make sure that no one was getting paid more than once. BuzzFeed News found that some people were furious that they had vouchers for a currency that didn’t yet exist.

  • How does e-commerce work on remote islands in the Pacific Ocean? In French Polynesia, locals have made their own online shopping service that relies on planes, cargo ships, scooters and the Facebook Messenger app, Rest of World reports.

Please meet the squirrel that loves an everything bagel.

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