Dotbams to emerge as major players in e-grocery

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Related tags: Online grocery, Online shopping, Cost, Marketing, Datamonitor

The US online grocery sector will reach a market value of $26.8
billion by 2005, according to a recent survey by market research
company Datamonitor....

The US online grocery sector will reach a market value of $26.8 billion by 2005, according to a recent survey by market research company Datamonitor. According to the report the market for online grocery shopping is growing strongly, with total consumer expenditure increasing at a compound annual growth rate of 108.6 per cent from $0.8 million in 1996 to $1.5 billion in 2000. However, it adds that consumers are deterred from using online grocers shopping services because they are unaware of such services in their local area. Consumers are also discouragedfrom using online grocery channels because they do not know which sites to visit. To combat such barriers to adoption, grocery executives need to pay special attention to marketing initiatives, the report suggests. Datamonitor maintains that dotbams (brick-and-mortar retailers who invest heavily in online shopping services) will emerge as the most important players in the future online grocery industry. Spurred by consumers' need forconvenience, they will provide consumers with a full range of grocery items and a more flexible and less expensive order fulfillment system of in-store pick-up. The ability to leverage the value of their existing brand, loyal currentcustomer-base and preexisting infrastructure will result in lower costs and allow them to reach profitability at afaster rate. "Major potential exists for joint ventures between other online service providers (e.g. Webvan, Amazon.com) and brick-and-mortar grocers which will further reduce overall costs and improve customer service,''Datamonitor​ stated.

Related topics: Science

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