Packaged Facts: 30% of U.S. Consumers Order Online for Same Day Delivery

Retail supercenter Target teams with Instacart for venture into thriving $23 billion grocery delivery service market

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Sep 21, 2015, 10:07 ET

ROCKVILLE, Md., Sept. 21, 2015 /PRNewswire/ -- In America, convenience is king, especially when ordering online. Through this nigh ubiquitous affinity for near-instant gratification, we've witnessed the rise and rise of same-day delivery services. In the recent report American Consumers in 2020, market research publisher Packaged Facts, reveals that roughly 3 in 10 consumers have ordered items online for same-day delivery in the past 12 months, excluding foods ordered for immediate consumption such as delivery pizza.

"Same-day delivery is already part of the daily lives of a substantial minority of online consumers," says David Sprinkle, research director, Packaged Facts. "Over the next five years, same-day delivery is expected to enter the online shopping experience of many more consumers, and become a more prominent part of our retail culture."

Presently Amazon and Walmart are the main beneficiaries of requests for same-day delivery. Data from Packaged Facts' August 2015 national consumer survey reveal that 44% of consumers have purchased products online from Amazon for same-day home delivery, while 37% have requested same-day delivery from Walmart. However, the growing popularity of online delivery services such as Instacart and other retailers could challenge for greater market share in coming years. This is especially true when it comes to the delivery of perishable products such as grocery items.

Walmart's fellow retail giant Target already has 24% of consumers making same-day delivery purchases online, and could prove to be the greatest threat to the market dominance of Amazon and Walmart. Target recently announced that it had teamed with Instacart to test grocery delivery to shoppers beginning September 15 in the Minneapolis area, where Target is headquartered. Beyond fruits and other perishables, the service would provide consumers with household, pet, and baby products that are delivered in either a one hour or two hour windows depending on shopper preference. The investment in same-day grocery delivery is part of Target's plans to expand to other markets and boost its online business under CEO Brian Cornell, who joined the company in August 2014.

Target's venture into the online grocery delivery business is timely, as the market is increasingly competitive and on the upswing. In the report Online Food Shopping and Grocery Delivery in the U.S.: Future of Food Retailing, Packaged Facts calculates that online grocery sales of food and beverages exceeded $23 billion in 2014, a 22% increase over sales in 2013.

Over the next five years, online grocery service providers are expected to develop models that solve lingering logistics problems while being profitable for the operators. As this happens, online services will become more widely available throughout the country and consumers will become more confident in shopping for food and beverages online. Packaged Facts expects these developments to take place in leaps and bounds, so that the market will advance at uneven rates, beginning at 49% in 2015 and peaking at 67%. The growth rate will gradually drop to the low double digits by the end of 2019 as the online share of grocery sales begins to reach critical mass at approximately 12%. Any success that stems from the Target and Instacart teamup will only further brighten the already sunny outlook for the grocery delivery service market.

For more information on American Consumers in 2020 or Online Food Shopping and Grocery Delivery in the U.S.: Future of Food Retailing, as well as other reports in Packaged Facts' industry-leading catalog of market research studies, visit: http://www.packagedfacts.com/.

About Packaged Facts – Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, consumer financial products and services, consumer goods and retailing, consumer packaged goods, and pet products and services. Packaged Facts also offers a full range of custom research services. Reports can be purchased at www.PackagedFacts.com and are also available on www.marketresearch.com and www.profound.com.

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SOURCE Packaged Facts