Source: The Economist
Grocery shopping is a giant prize–accounting for around $800bn of spending a year in America. But it is also a notoriously tough business, with price-sensitive customers keeping a tight lid on margins. Add in online delivery and it often becomes unprofitable. Convincing customers to buy more of their groceries online is the holy grail for a digital-native company like Amazon, which is a newcomer to the business. But Amazon’s “technology first” approach hasn’t been enough to win over the market, or the customers who still see the value of shopping in-store. This leaves grocery stalwarts like Walmart with an opportunity–to expand online, while utilising their foothold in brick-and-mortar stores. With margins so tight, yet the lure of convenience strong, what is the future for online grocery shopping?