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Over 40 percent of consumers will buy specialty foods online

August 29, 2014

Why make a run to the liquor store when you can find your next bottle of wine online?

Why make a run to the liquor store when you can find your next bottle of wine online?

The internet is increasingly becoming the destination for consumers in search of some groceries or a few drinks, according to a subscription BI Intelligence report cited by Business Insider. The grocery market is worth $600 billion annually, and though e-commerce vendors have yet to grab a significant portion of that revenue stream, that opportunity may well be on its way.

The most popular e-commerce categories remain non-consumable, such as durables and entertainment products, Nielson found. In comparison, the market for consumable products such as groceries is tiny, but it is beginning to show potential. Nielson measured consumer online purchase intention rates in a variety of product categories and found that in almost every one – including alcohol – the rates nearly doubled.

For alcohol, rates were fairly miniscule to begin with when Nielson measured online purchase intention rates in 2011. A mere 8 percent of consumers had intentions to purchase alcohol online in 2011, versus 17 percent in 2014 – a growth rate of 9 percent in three years. In the groceries category intention rates did not strengthen quite as much as alcohol, but still managed to rise from 22 percent to 27 percent.

Breaking into the market with specialty orders
Specialty foods may be the key for a notable e-commerce entry into the food and beverages market, according to the BI Intelligence report. Foods that fall into categories such as gourmet, health- conscious and ethnic or are uncommon in some other sort of way are growing in popularity amongst online shoppers. Concierge shopping and subscription prepared meals have become increasingly popular with internet consumers.

The breadth of options makes shopping for specialty foods online a much simpler task than doing so in person. Only 15 percent of adults have purchased general food items online, according to information from a Harris Interactive report. However, a more significant 25 percent have bought specialty food and beverages through the internet. And though the majority of consumers still prefer to purchase specialty food and beverage items in person, they are much more receptive to the idea than they are to buying general food items through e-commerce channels. The report found that 78 percent of adult consumers prefer to purchase general food items in-person, versus 57 percent for specialty foods.

An example of a specialty company taking advantage of the lucrative e-commerce market is Club W. It is a subscription wine club, started in 2010, that delivers to shoppers a wine selections on a monthly basis, according to The New York Times. The price point is relatively low, $45 a month for three bottles of wine. When a customer signs-up for Club W they fill out a form that consists of six questions used to construct a “palate profile” of the shopper. Questions touch upon taste preferences such as customers’ feelings towards coffee and citrus.

In Seattle, San Francisco, Los Angeles and San Diego, shoppers are shopping for groceries online for different reasons. It is in these cities that Amazon has begun to test its same-day grocery delivery service, according to The Guardian. For Amazon, the hope is to catch up with rival Wal-Mart in sales. Jeff Bezos, the company’s founder, considers groceries to be one of the final frontiers for online retail. In 2007, in reference to Wal-Mart’s sales, Bezos stated “In order to be a $200 billion company we’ve got to learn how to sell clothes and food,” according to an excerpt from Brad Stone’s book The Everything Store: Jeff Bezos and the Age of Amazon, quoted by the publication.

With online specialty food and beverage transactions occurring online more often, it seems only a matter of time before online retailers begin to breach Bezos’ final frontier.

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