Online Grocery Market Still Kicking in North America

A pair of studies have found that the online purchases of food and groceries in both the US and Canada are in the early stages of development, and there is a significant opportunity for growth.

The “Canadian Women Online Study” conducted by J.C. Williams Group for DoubleClick Canada found that 27 percent of Internet non-buyers indicated they are likely or would consider buying groceries online in the future. The survey was conducted among a Canadian national sample of 2,121 female Internet users.

“Only 4 percent of female Canadian Internet buyers have made a food or grocery purchase online, and a further 5 percent have browsed online to facilitate offline purchases,” said Wendy Muller, Managing Director of DoubleClick Canada. “This is a clear indication that although some Canadian women use the Internet for groceries, both manufacturers and retailers need to educate and refine their product and service offerings to further legitimize the Internet as a relevant channel for food and grocery purchases. They need to build trust.”

In the US, NPD Group Inc. estimates that online grocery sales reached about $260 million during the three months ending in April of 2000. Only 9 percent of all consumers who bought anything over the Web bought groceries online during that period. But online grocery purchasers also registered the highest expected future purchasing intention when compared to other categories. Among consumers who have made online grocery purchases in the last three months, 40 percent bought only once, 40 percent bought two to three times, and 20 percent four or more times.

NPD’s study also found that online grocery purchasers are more likely to purchase health and beauty aids, office supplies, flowers/gifts, and prescription medications online than they are likely to make an online purchase in the other 11 categories NPD tracks (including computers/software, consumer electronics, and books/music/video. Compared to average online purchasers, online grocery purchasers typically are wealthier, middle aged, female, more educated, and tend to live in the Northeast or South regions of the US.

The J.C. Williams/DoubleClick study also found that 70 percent of female Canadian Internet users use the Internet during the shopping process.

“Clearly, the Internet is having a dramatic influence on female shopping behavior, and it is essential for all Canadian marketers to understand what role the Internet will play to influence and facilitate consumer behavior,” Muller said.

The Canadian study also found that 46 percent of female Canadian Internet users have made a purchase online, and 26 percent use the Internet to browse or shop for products before purchasing offline. The percentage of female Canadian Internet users who have made an online purchase has grown by 21 percent since October 1999.

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