The food and beverage industry is being transformed by growth in e-commerce, however, many grocers see it as the biggest threat to their businesses, according to a survey released by TD Bank, America’s Most Convenient Bank®.

Grocery e-commerce sales in the U.S. will grow 18% this year, making it the fastest-growing product category online, according to 2019 data from eMarketer. As a result, revenue is expected to surpass $19 billion by the end of the year.

TD Bank’s survey, conducted at the 2019 Groceryshop conference, revealed that many grocers are increasingly worried about this trend. Nearly 30% of respondents ranked new e-commerce channels as the biggest challenge to their business, followed by evolving technology (26%) and changing consumer behaviors (25%).

“E-commerce is rapidly changing the way consumers buy groceries,” said Joseph Nemia, Head of Asset Based Lending at TD Bank. “Traditionally, the industry catered to consumers shopping at brick-and-mortar stores, but this is changing with the use of technology and mobile devices offering options of online ordering, buy-online pick-up in-store and home delivery. To remain competitive, grocers need to invest in channels that deliver speed, convenience and savings for consumers.”

Driven by technology and an on-demand culture, younger generations of consumers have grown up expecting services and products to be available immediately, anytime and anyplace, from top-tier brands. While the need for immediacy is not a new challenge, 57% of respondents feel that convenience shopping will be the biggest consumer behavior to impact their business. Other consumer behaviors perceived to impact businesses include:

• A focus on healthier eating habits (17%)

• Cost-conscious shopping (17%)

• Sustainability and environmentalism (4%)

Respondents emphasized the need to be pivotal to accommodate shifts in consumer behavior. While e-commerce has caused considerable disruption, brick-and-mortar continues to dominate the industry, and most respondents (56%) said that online sales represent less than 20% of total sales.

• Grocers were split on where they are making the most investments in delivery services between traditional brick-and-mortar, buy-online pick-up in-store (BOPIS) and online.

• BOPIS narrowly beat out brick-and-mortar and online delivery as the preferred choice for 34% of respondents.

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