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E-commerce CPG sales hit $58.9 billion in 2018, a 35.4% increase from the year before. While these sales only account for 11% of all CPG sales, they represent 64% of total omnichannel growth, according to a new report [pdf] from IRI.

Vitamins are the biggest selling e-commerce CPG category, bringing in $7.4 billion last year, a 35% year-over-year increase. E-commerce sales of Vitamins also represents half (49.9%) of omnichannel sales.

While Vitamins were a big seller, Pet Products are taking a bite out of the e-commerce market. Pet Supplies (not including pet food) emerged as the category that has the fastest growth rate of the 10 largest CPG e-commerce categories (by dollar sales). Products for pets like toys, collars and accessories earned $5.7 billion last year, a 44% increase from 2017. Along the same line, the third highest selling CPG category online was Pet Food, which enjoyed a 42% increase y-o-y, reaching $3.5 billion in sales.

Other CPG e-commerce findings worth noting are in the categories of Women’s Fragrance and Hair Conditioner. While Women’s Fragrance had a relatively modest $1.4 billion in online sales last year, this figure represents just over two-thirds (67.4%) of omnichannel sales. And while Hair Conditioner may be at the bottom of the top ten CPG e-commerce categories (by dollar sales) with $946.3 million in sales, it was the second highest growth category, with a 43% increase year-over-year.

With this leap in CPG sales in 2018, what does it mean for the growth in online grocery shopping?

Online Grocery Shopping in the US Has Room for Growth

One-quarter (25%) of US consumers who took part in a recent survey by Bain & Company reported using an online grocery service. Of those shoppers, only 26% use the service more than once a month.

While grocery shopping online may be seen as a convenience and potential time saver, the survey revealed that the time savings are not always immediate. Only 42% of first-time online grocery shoppers found that the online grocery shopping experience saved time. However, for those who had used the service more than ten times, about 8 in 10 reported time savings.

The assumption can be made that the initial set up and learning the process of shopping for groceries online can be time-consuming, but once shoppers got the hang of the process, it becomes easier and takes less time.

Figures from Commonsense Robotics [pdf] indicate that major retailers are making a bigger move towards grocery e-commerce, investing more than $28 billion in the past 18 months. The largest investment, by far, has been made by Amazon with its $13.7 billion acquisition of Whole Foods in the summer of 2017.

The report also revealed an average estimated growth in grocery e-commerce sales of 35% y-o-y in 2018, reaching $24 billion. Despite the investments being made in online grocery shopping and the increase in sales, that $24 billion only represents 3% of the $800 billion in sales for the total grocery marketing last year.

About the Data: IRI’s Consumer Connect Survey is published after each calendar quarter and reflects shoppers’ reported economic health, as well as behaviors and attitudes toward purchasing and utilizing CPG and health care products. Bain & Company’s data was compiled from a survey of more than 8,000 US grocery shoppers.

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