Berning, Casie

Ernst, Stanley C.

Hooker, Neal H.

English

Research Papers in Economics

Where are E-Grocers, and Why?
Casie Berning, Neal H. Hooker, and Stan Ernst
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, house-
hold size, and level of education are found to be 
key indicators of interest in buying food online. 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 mea-
sures 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 av-
erage amount that households spent in food stores 
were also assessed. A descriptive model of the role 
of such variables in deﬁ  ning the probability that a 
particular zip code is 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 propor-
tion of “ideal” consumers. 
Preliminary Results: The literature review high-
lighted that an “ideal” consumer is likely to be be-
tween the ages 25 and 44, to live in a dual-earning 
household with a household income greater than 
$50,000, is more likely to have children, and to 
be looking for convenience. E-Grocers service ap-
proximately 1,371 distinct zip codes nationwide in 
twenty-six states. E-Grocery zip codes have house-
hold with incomes $10,000 greater than the national 
average and that spend $1,000 more per year on 
groceries. Also, compared to the national average, 
zip codes where E-Grocers operate have three times 
more households, teenagers per household, credit 
cards, adoption of E-commerce, and have three 
times more households commuting 45 minutes or 
more per day. More details about this study can be 
found at http://aede.osu.edu/programs/e-agbiz/.
The authors are student, assistant professor, and program 
manager, College of Food, Agricultural, and Environmental 
Science The Ohio State University, Columbus.

Where are E-Grocers, and Why?

Abstract

Similar works

Full text

Available Versions

Research Papers in Economics