The US grocery delivery landscape is rapidly evolving, and a report from Wing, a drone delivery company owned by Google’s parent company Alphabet, offers a detailed perspective on the future of the industry.
The growth of grocery delivery and the role of drones
According to a Wing report, 60% of U.S. consumers now prefer grocery delivery over shopping in-store, a significant increase from 45% just two years ago. The convenience of ordering groceries online has clearly captured the hearts and wallets of Americans. In 2024, the U.S. grocery delivery market is projected to exceed $150 billion, growing 25% from 2023. This growth is driven by advancements in delivery methods such as drones, which are revolutionizing logistics and offering faster and more sustainable options.
Even more interesting is the age breakdown. Millennials and Gen Z are leading the way: 70% of Millennials and 65% of Gen Z consumers report using grocery delivery at least once in the past three months. These groups are accustomed to convenience and are willing to pay for services that save them time. In contrast, 40% of Baby Boomers have started using grocery delivery, a number that’s up 15% since 2020.
What’s most striking about Wing’s report is the expanding role of drones in grocery delivery. Traditional ground-based delivery is plagued by issues like traffic congestion, long distances, and labor costs. Drones offer a way to avoid these challenges and reduce delivery times by up to 50%. In areas where drones are already operating, Wing reports that delivery times have dropped from an average of 45 minutes to 20 minutes.
Drones are particularly effective in hard-to-reach areas, such as rural communities and areas with poor road infrastructure: Research shows that 80% of customers who live in rural areas report that drone deliveries are faster and more efficient than traditional methods.
Another benefit is cost savings: drone delivery can reduce operational costs by 30% due to reduced fuel consumption and less reliance on human labor. Wing research predicts that drones could be responsible for up to 25% of grocery deliveries in the U.S. by 2026, saving the industry billions of dollars annually.
The survey also noted that 68% of grocery delivery customers are willing to pay more for environmentally friendly delivery options, including drone-based services — an important trend as it signals an increasing sustainability mindset among consumers.
Retailers and their response to change
Grocery retailers have had to adapt quickly to meet growing delivery demands: Major chains like Walmart and Target have increased their delivery capacity by 40% over the past year by partnering with third-party providers and investing in drone technology. Grocery retailers that have integrated drone delivery into their logistics have seen a 25% increase in delivery efficiency, according to a Wing study.
The report highlights that 75% of retailers are currently considering or actively using drones as part of their delivery strategy. Small, local grocers that have previously struggled to compete with larger chains are finding that their niche market and personalized delivery services can give them a competitive advantage. 30% of small grocers have already started experimenting with drone delivery.
Data from Wing’s 2024 survey hints at a future where the majority of grocery shopping will be done online: The report found that 80% of consumers believe they will primarily do their grocery shopping online and prioritize delivery within the next five years.
Drone technology will play a big role in this change: By 2026, the U.S. drone delivery market is expected to grow 30%, contributing to a projected $30 billion drone logistics industry. As retailers and technology providers continue to innovate, consumers will benefit from faster, more affordable and environmentally friendly delivery options.
See the full report here.
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