Abstract

Problem:  E-Grocery remains an emerging market, with a low adoption rate both in terms of geographic market coverage and customer base. It is unclear how much of this low adoption is due to an incorrect selection of initial markets, how much is consumer resistance, and how much is merely the current level of maturation within this industry. E-Grocers need tools and processes to help identify the right markets with the right consumers.

Methods:  A comprehensive literature review helps determine characteristics of the “ideal” e-grocery consumer.  Age, gender, income, household size, and level of education are found to be key indicators of interest in buying food online.  Based upon this, a zip code-level database of those markets currently serviced by E-Grocers was constructed.  A socio-economic analysis was then completed on each zip code currently serviced by one or more E-Grocers.  This analysis looked at the key demographic measures of, age, gender, income, level of education, and size of household.  Other characteristics such as number of households with internet access, adults with a credit card, average commute time to work (a proxy of “time starved” consumers), and the average amount that households spent in food stores were also assessed.  A descriptive model of the role of such variables in defining the probability that a particular zip-code will be serviced by an E-Grocer is presented at the national level., The market coverage strategies of leading “bricks-and-clicks” E-Grocers is also assessed. This analysis helps us understand if E-Grocers are entering markets with a large proportion of “ideal’ consumers. 

Preliminary Results:  The literature review highlighted that the “ideal” consumers are likely to convey the following characteristics; be between the ages 25 and 44, live in a dual earning household, have household income greater then $50,000, more likely to have children, and are consumers looking for convenience.  E-Grocers are servicing approximately 1170 distinct zip codes nationwide.