Are Online Grocery Stores a Fad or the Future?

John Krautzel
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The Internet has changed the way consumers shop for merchandise. Customers now have more retail options and methods to research the details of those options than ever before. However, online grocery stores are still a fairly recent phenomenon, with multiple business models. Some services take your online shopping list, buy your groceries from a nearby store and deliver them to you. Others are shipping goods directly from their own warehouses to your door.

Fresh food provides the biggest logistics problem for those selling food online. Non-perishables are simple enough because they can be shipped without regard for spoilage. Optimizing delivery speed remains a challenge, because many customers want groceries the same day they order them. This requires a local distribution center within driving distance of the customer. However, perishable items like milk can't be shipped since they would spoil prior to delivery unless expensive cooling methods were used throughout the shipping process.

Some online grocery stores use delivery staff to pick up perishable goods from local stores in the customer's home market for immediate delivery. These stores use the local supermarket as their own supplier and simply mark up the price of each item. Other stores are working on developing a national infrastructure where they can use hubs located across the country to deliver groceries to customers on a monthly, weekly or daily basis.

The advantage to the customer of an online grocery store is convenience. People who use online grocery stores shop from their computer, tablet or smart phone according to the demands of their personal schedules, without wasting time traveling to and from a physical store, pushing a cart through aisles and waiting in checkout lines. You don't even have to be home when the delivery gets there, as most services can leave your order at your door upon request. The time-saving benefit of online grocery stores is something that many people are willing to pay extra money for.

Online retail is on the rise overall. Online grocery stores are still finding their footing, and growth has been slow to start and largely focused in or around large cities to give the companies access to the largest possible client base. However, selling food online is unlikely to go away, as even a local store benefits by offering a delivery service if it has a website that accurately shows its merchandise and can process orders.

Venture-capital firms are noticing the growing trend of online grocery shopping and have invested in start-ups looking to grow the industry. Online grocery stores are unlikely to become a fad anytime soon, and the distribution methods will improve, expand and get more efficient with time.

Smaller markets still don't have the options that cities do when it comes to online food purchasing, but the gap is likely to narrow as the industry grows more sophisticated. Much like other forms of online retail, online grocery stores require time for the general public to get fully comfortable with the concept and the experience. In the meantime, the future for the industry looks promising.


(Photo courtesy of (Ambro)/


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