An Overview of E-commerce Trends in the United States

August 2017

  • United States dollar (US$)

Basic elements to consider for small and medium-sized enterprises (SMEs) doing business in the United States via e-commerce channels

Quick facts

  • Population: 323 million
  • Internet population: 274.6 million Internet users
    • 46% use the web to shop.
  • All online purchases: US $263.2 billion
    • E-commerce accounts for 7% of national retail sales, with a growth rate of 13% from 2010 to 2015.
  • Consumer spending :
    • Total consumer spending: US $37,952 per capita
    • Total online consumer spending: US $908.9 per capita
    • Total grocery consumer spending: US $4,130 per capita
    • Total online grocery consumer spending: US $18.8 per capita (Total online grocery data only include food and drinks)
  • Total Online Grocery Market: US $6.1 billion
    • With a growth rate of 7.9% from 2010 to 2015.

Source: Planet Retail, 2016.

Top methods of accessing the Internet for shopping

  • 318.5 million mobile phone users
    • 75% are smartphone users
  • 267.4 million personal computer users
  • 222.6 million laptop users
  • 113.7 million tablet users

M-commerce is forecast to account for 30% of all Internet retail sales, with a growth rate of 24.4% (2015 to 2020). 75% of United States population uses a smartphone. Retailers are leveraging shoppers' smartphones to deliver personalised content, offer real-time deals and capture data.

Source: Euromonitor, 2016

Characteristics of online grocery shopper

  • Parents with young kids - Want a hassle-free way to shop online 1-2 times monthly for non-perishable stock-ups.
    • Value great customer service with accurate delivery times.
    • Accepting of either delivery or pick-up online shopping methods.
  • Young urbanites - Shop online for convenience 1-2 times monthly for larger stock-up to avoid delivery fee.
    • Value easy-to-use, intuitive website and fee-free incentives.
    • Prefer delivery of online purchases.
  • Tech-savy online shoppers - Don't like shopping in stores and frequently buys for fill-in and stock-up across fresh and non-fresh grocery.
    • Value quick delivery and wide online assortment.
  • Budget-driven shoppers - Shop online to minimize spending on a weekly basis to fill-in for similar basket, in fresh and non-fresh grocery.
    • Value easy reordering of past baskets and fee-free incentives.
    • Accepting of either delivery or pick-up online shopping methods.

Source: Excerpted from “Retail 4.0: The Future of Retail Grocery in a Digital World”, McKinsey's Asia Consumer and Retail Practice, www.mckinsey.com. Copyright © 2017 McKinsey & Company. All rights reserved. Reprinted by permission.

Top Internet e-grocers

Amazon attracts 48% of all online grocery trips.

Internet e-grocers (in grocery sales - US$ millions)
Company Sales
Source: Supermarket News. Online Shopping Leaders, 2016.
Amazon 2,100
Kroger Co. 650
Peapod 650
FreshDirect 555
Wakefern 385
Walmart 350
Albertsons 250
Costco 170

American customer behaviour and trends

American consumers are shopping more online for edible goods due to the convenience and growing preference for premium and private label products. This trend is beneficial to Canadian Small and Medium-sized Enterprises (SME's) as there is greater opportunity to differentiate and provide personalized and compelling services that increase sales and earn greater consumer loyalty.

American shoppers want:

  • Clean product labels with ingredients they know and can pronounce.
  • Natural and healthy food products.
  • Convenient and on-the-go meals.
  • Ethical/environmentally friendly brands.
  • Trusted brands.

Source: Euromonitor, 2016.

Understanding the United States' online marketplace

  • Online grocery remains in its infancy because of competitive pricing and complicated delivery logistics.
  • E-grocery success relies heavily on overall warehouse utilization; customer penetration in densely populated areas; and order frequency/basket size.
  • Traditional retailers are creating purchasing occasions beyond the physical store, blurring the lines between online and offline.
  • Retailers are learning more about their customers by developing the ability to analyze large amounts of data.
  • Customers are increasingly willing to engage with retailers through innovative loyalty programs, location-based services and smartphone applications.
  • E-grocers are starting to understand the need to encompass a full digital engagement strategy to support brand development across multiple digital and in-store touch points.

Sources:
Planet Retail, 2016.
Excerpted from “Retail 4.0: The Future of Retail Grocery in a Digital World”, McKinsey's Asia Consumer and Retail Practice, www.mckinsey.com. Copyright (c) 2017 McKinsey & Company. All rights reserved. Reprinted by permission.

Company spotlight

Amazon

  • A leader in e-commerce sales among food retailers.
  • Extremely successful in markets where multi-channel supermarkets are not well developed with online offerings.
  • AmazonFresh offers fresh groceries online, like dairy, meat, fresh fruits and vegetables, and prepared meals and offers same day delivery.
  • Expanded Amazon Prime Now service to offer one-hour delivery of more than 7,000 products from selected local shops and 15,000 items offered by Amazon such as fine wines and spirits.
  • Expanded home delivery options with its “Amazon Dash” Wi-Fi buttons to instantly capture customer reorders.
  • Operates a Prime Pantry service for packaged food and partners with local grocery stores to offer a more limited selection of perishables across major United States cities.
  • Amazon began launching its own premium private label food brands such as Happy Belly gourmet coffee & Mama Bear baby food.

Sources: Planet Retail, 2016.
Euromonitor, 2016.
Supermarket News. Online Shopping Leaders, 2016.

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