Top 5 Grocery E-Commerce Stories of 2017

December 15, 2017

2017 has been a big year for retail. Between the threat of a 'retail apocalypse' and Amazon's quest for dominance in the retail sector, it has been an uncertain time for retailers. While brick and mortar retailers face an 'adapt or die' prospect, e-commerce continues to grow. And while success in e-commerce isn't always assured, the 4 top e-commerce stories of 2017 prove that 'disruption' may well be the retail buzzword of the year.

 

1. Amazon acquires Whole Foods

Nothing rocked the retail sector more in 2017 than the news that Amazon had acquired Whole Foods Market - a move that cemented Amazon's intention to disrupt and dominate the retail sector. A reduction in prices had an almost immediate effect, boosting customer traffic by 25%. At the same time, Amazon sold $1.6 million of Whole Foods’ private label products in the month following the acquisition. And while Amazon's scaling back of its Amazon Fresh service suggests that they don't have all the answers when it comes to grocery retail, the 'Amazon effect' had the biggest influence on retail in 2017, prompting existing retailers to innovate and compete. 

 

2. Meal kits go omnichannel

 

Disruption in the grocery sector isn't limited to Amazon. The meal kit space is booming, and 2017 was the year that meal kits truly went omnichannel. While Walmart began selling - and selling out of - meal kits, Kroger launched its own meal kit range, Prep+Pared, which can now be found in more than 10% of their stores. And with Albertsons acquiring meal kit company Plated and offering their meal kits for sale in-store, it's clear that retailers and meal kit providers understand the benefits of adopting an omnichannel approach. It hasn't been all smooth sailing in the meal kit space in 2017 however. Since going public in June, Blue Apron has had its struggles, and customer loyalty is still a huge issue in this often heavily discounted sector. 

 

3. Voice search takes off

Voice search is not new. Intelligent personal assistant Siri first launched on the iPhone 4s in October 2011. Voice search has come a long way in just 6 years and 2017 was the year of Alexa. Alexa's monthly unique users grew 325 percent between May 2016 and May 2017, and according to Amazon's 2017 Trends Report, the Echo Dot was their #1 selling product on Black Friday globally. 2017 was also the year that voice ordering went mainstream. Ocado released an Alexa Skill that allows shoppers to update orders using their voice while Walmart partnered with Google Home to offer their own voice ordering service. Significant Black Friday and pre-Christmas discounts on devices from all the main players mean that digital voice assistants are shaping up to be the hottest gift this Christmas, and the voice search boom is set to continue into 2018.

 

4. Online grocery predicted to grow

 

If you read anything about online grocery in 2017, you'll almost certainly have come across this statistic from Nielsen:

 

About one-fifth of all grocery spending (a total of $100 billion) is expected to come from online shoppers by 2025.

 

In the US, Amazon captured 18 percent of online food and beverage sales in 2017, more than any of their competitors. Just 13.3% of US adults regularly shopped online for groceries in 2017, however. While there are still some issues to be solved in online grocery, and more specifically home delivery, click and collect is proving to be a more attractive option for both retailers and consumers. Walmart expanded its click and collect offering in 2017 - and click and collect is set to dominate the online grocery space in 2018. 

 

5. Shoppable recipes

 

Amazon formed recipe integration partnerships with Allrecipes and Fexy Media in 2017, offering home cooks the chance to shop directly from their favourite recipes. Shoppable recipes bring with them impressive benefits, including increased conversions for retailers, and greater convenience for consumers. Not to be outdone, Walmart joined forces with Buzzfeed Tasty to make their ever-popular cooking videos shoppable into 2018. While shoppable recipes on retailer websites aren't new, Amazon and Walmart clearly see value in taking recipe integration a step further by seeking third party partnerships. 

 

2017 was a breakthrough year for the grocery sector. Amazon disrupted, their competitors responded and consumers benefitted. With 72% of retailers planning on investing in machine learning by 2021, grocery e-commerce is primed to take off in 2018.

 

Check back in on Wednesday when we'll be sharing the top smart kitchen stories of 2017. 

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