Brief

Survey: 77% of US grocers don't offer click-and-collect programs

Dive Brief:

  • PG’s 84th Annual Report of the Grocery Industry reveals that the percentage of grocers offering click-and-collect programs has increased from 15% to 23% from 2015 to 2016, meaning that 77% still don't have such programs, according to Progressive Grocer. The report surveyed 125 U.S. retail grocery executives. 
  • The number of grocers offering fully fledged omnichannel programs grew from 9% to 12% in the last year. 
  • Respondents to the survey said that using social networks is the most valuable tool for customer engagement, taking the top spot from last year’s No. 1 — associate feedback.

Dive Insight:

While click-and-collect has become a popular consumer trend in several markets like France and the UK, the data from Progressive Grocer shows that despite the trend starting to take hold, the vast majority of U.S. grocers still don't offer such programs. 

Providing shoppers with the opportunity to order online and pick up items in-store allows retailers to offer greater convenience to customers as e-commerce starts to penetrate the grocery business. Click-and-collect is cheaper and less complicated to operate than home delivery, and offers a chance for customers to add incremental purchases inside stores once they do come to collect.

But retailers face significant challenges in implementing these services, despite the opportunities they present: The addition of click-and-collect services increase costs that can make turning a profit more difficult. While retailers may be keeping their customers happy, it could hurt the bottom line in the short term while the kinks are worked out.  

Competition comes from online grocery delivery services, a sector that's growing fast. But not every consumer is a fan of buying groceries online, and it is one of the only product categories that e-commerce has not yet disrupted in a significant way.  According to a recent poll by trade publication Internet Retailer, 73% of consumers who said they’d picked up a product in store did so to avoid shipping fees, while 30% said they couldn’t wait around for delivery. 

But like any other category, online shopping for groceries is likely to gain traction in the coming years, especially if Amazon has any say in the matter. According to new statistics from the Food Marketing Institute and Nielsen, online grocery spending is expected to reach $100 billion by 2025 while the percentage of shoppers doing their grocery shopping online is estimated to more than double. By 2025, 72% of all shoppers are projected to conduct 25% of their grocery shopping online. 

Wal-Mart and Kroger have both increased their click-and-collect offerings and analysts believe the segment will continue growing as consumers demand more convenience and grocery retailers seek to adapt to online disruption. 

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Filed Under: Grocery Ingredients Corporate
Top image credit: Target