Online Grocery Shopping Is No Longer Just a Millennial Story

A multigenerational trend

Author: Andria Cheng

July 7, 2017

Millennials have gotten a lot of credit for disrupting literally every sector of the retail market, including online grocery shopping. However, food retailers and CPG brands could be making a big mistake by ignoring older shoppers online.

Among primary household grocery shoppers, 23% have bought groceries online in the last three months, according to an April survey of nearly 1,700 shoppers by market research and consulting firm TrendSource in a study released Thursday. The breakdown among age groups suggests millennials don’t have a significant lead over the other age groups. While 24% to 26% of millennials ages 18-37 said they shop groceries online, 24% of Gen Xers also buy online. That's compared with 21% of Baby Boomers.

Millennials’ “upbringing and technology environment made them more adaptable to online shopping experience sooner,” Jana De Anda, vice president of business development at TrendSource, which counts among clients Fortune 100 grocers and restaurants like Yum Brands' KFC, said in an interview. “A lot of the trends started with them but it doesn’t end there with regards to online grocery shopping. Grocers need to pay attention to all generations.”

While millennials, and even the younger Gen Z, may be mostly digital natives and early adopters of the new ways products and services are bought and sold, other age groups are also catching on fast.

More than 70% of consumers will engage with online food shopping within 10 years, up from 23% currently, according to a Nielsen and Food Marketing Institute study published earlier this year. The percentage of millennials (defined ages 18-34 in the study) buying groceries online is only slightly higher at 28%, according to the study.

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Why is this significant? Over the next 10 years, the amount of money spent online on groceries could top $100 billion, the grocery equivalent of around 3,900 stores, representing 20% of industry spending, according to the Nielsen-FMI study. Getting the online share is even more pressing, given the fact that traditional grocery stores and CPG brands are already losing customers to startup labels and formats like a Trader Joe’s that cater to their tastes for natural and organic items.

The TrendSource study also found that millennials don’t differ much from other age groups when it comes to what they like most about buying groceries online or through a mobile app: convenience is a predominant factor for all age groups, cited by 60% to 78% of consumers from millennials to baby boomers. No more than 16% of consumers across those age groups cited other factors, whether price, product quality and availability, specific brands or rewards.

Meanwhile, more than half of the respondents, (slightly led by 58% of millennials and 55% of Gen Xers), in the TrendSource survey said they prefer to order through a local grocer over buying through an online and app vendor like Amazon.

“This should give grocers hope, but it should also be a kick in the pants” if grocers aren’t already building out their online operations, the study said, noting that Amazon's recent purchase of Whole Foods should be a wake-up call.  With Whole Foods deal, it said, “Amazon has stepped right into a local footprint.”

Among groceries people buy online, again from millennials to Baby Boomers, at least 71% list dry and household goods and more than three-fifths of all age groups cited cleaning supplies.