US grocery ecommerce channel set to hit $72.6bn by 2024

Stewart Samuel
Program Director - Canada
@RetailAnalysis

Date : 07 November 2019

We review the latest forecast for the US grocery ecommerce channel and the drivers underpinning future growth.

Channel share up to 4.0%

New research released at IGD Live, highlights the continued strong growth potential of the US online grocery channel. From 2019 to 2024, sales through the channel, are forecast to increase from $30.4bn to $72.6bn, reflecting a CAGR of 19.0%. Channel share over the period is expected to more than double from 2.0% to 4.1%.

Period of aggressive adoption

The US grocery ecommerce channel is currently in a period of aggressive expansion. As new retailers continue to enter the channel, existing operators are rolling-out pickup and delivery options at a rapid pace. Gaining scale is a critical element on the pathway to profitability. Retailers are focused on building capacity and enabling faster and more profitable deliveries. This continues to drive innovation around the two largest cost elements, picking and delivery. Over the last year, retailers have pushed ahead with developing dark stores and micro-fulfillment centres, along with the testing of driverless vehicles, in the pursuit of improving channel efficiencies.

Source: IGD Research

Fulfillment in focus

Although store-based picking models dominate in the US, over the last year, an increasing number of retailers have started to test dark store models and automated micro-fulfillment. The latter solution, which sees an automated picking facility built within a store’s backroom, enables retailers to repurpose excess space in their stores while developing a more profitable ecommerce model. Supporting stronger growth, we expect to see further innovation in the customer experience, retailer cross-channel collaborations and ecosystem development.

We look at the scale and scope of the US online channel, key trends shaping its development, retailer strategies and the growth opportunity over the next five years.

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