Despite economic headwinds recently, online grocery is expected to keep growing alongside efforts to make the channel more efficient and profitable, Grocery Doppio’s research found.
While digital grocery sales reached $128 billion in 2022, the grocery industry lost $298 million in margin with their online grocery business, Grocery Doppio found. The survey responses further underscore that e-commerce profitability is the main challenge plaguing the industry. In December, for example, only 34% of grocers said that their digital operations platforms — including fulfillment, scheduling and picking — were prepared for the spike in sales during the holiday season.
Other major issues facing online grocery, according to industry experts, include inflation (91%), rising workforce costs (78%) and uncertain product availability (71%), per Grocery Doppio.
While overall technology budgets will be smaller this year, spending will continue on digital efforts and almost a quarter (23%) of grocers will boost their spending on digital by 11%-16% compared to 2022, according to the scorecard. A fifth of grocers will test and deploy artificial intelligence, while one in seven will do the same for robotic fulfillment, Grocery Doppio predicted.
The findings indicate that grocers will look to gain more control over their operations by brining services in-house. Already, 10% of grocers moved away from outsourcing to third-party platforms to run their e-commerce operations, and Grocery Doppio predicted that more grocers will evaluate or execute in-house digital media monetizations solutions.
This year will see the grocery industry further deepen omnichannel and digital efforts, Grocery Doppio noted, predicting that grocers will see a 16% lift in the number of pickup orders and a 47% increase in the number of shoppers using mobile devices in-store.
Grocery Doppio also forecasts that 87% of all grocery shoppers this year will make online purchases.
The scorecard is based on shopping data from 1.7 million shopper orders analyzed from Jan. 1, 2022, to Dec. 31, 2022, and surveys of 22,000 grocery shoppers and more than 2,000 grocery industry executives.
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From delivery robots to scan-and-go, some technology and vendor partnerships haven’t lasted for grocers.
Digital sales have come down from their early pandemic peaks, but grocers are still forging ahead with new experiences and adjustments aimed at boosting profitability.
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Get the free daily newsletter read by industry experts
From delivery robots to scan-and-go, some technology and vendor partnerships haven’t lasted for grocers.
Digital sales have come down from their early pandemic peaks, but grocers are still forging ahead with new experiences and adjustments aimed at boosting profitability.
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