Future of online grocery shopping
The conventional wisdom has been that the pandemic will spark a widespread and permanent shift in American habits from analog to digital. But what about that most basic habit — grocery shopping?
Americans spend more on groceries than almost anything else, and how we buy food is considered a finger in the wind to assess the future of our shopping habits. Right now, the direction is ... unclear.
I have been scouring data on online grocery shopping in the U.S., and I will be humble and say that I don’t have a clear picture.
Americans are definitely buying far more groceries online than we were in 2019, but in some notable categories such as fresh and frozen foods, the growth of online sales is much lower than it was before the virus started to spread widely in the U.S. In some recent months, online grocery sales have dropped or barely budged from the prior year.
It’s inescapable that digital sales will keep increasing as a share of U.S. spending, including for groceries. But digital transformation is often not a straight march up a mountain but more of an uneven climb up, down and sideways. And grocery buying has been on a particularly jagged trajectory.
My wishy-washy analysis is that Americans haven’t fallen head over heels for buying bananas over the internet, but we aren’t rejecting it, either.
Along with the figures that showed e-commerce lost ground last year to shopping in person, the muddy picture of online groceries shows that human behavior may be too complicated for simple explanations.
Here’s where things appear to stand: Before 2020, Americans weren’t that jazzed about having groceries delivered to our doors. By choice or necessity, almost all U.S. grocery buying happened in stores.
The amount of grocery purchases made online has increased to somewhere around 7% to 15% from perhaps 3% or 4% of total sales in 2019. (Analysts told me that the data for the roughly $1 trillion of yearly U.S. grocery sales should be taken with grains of salt.)
Grocery delivery to our door is still relatively dinky, but ordering groceries online for pickup at the store took hold during the pandemic and is sticking. Maybe.
There’s been some backsliding on online ordering, however, and the vast majority of Americans are still shopping for groceries the old-fashioned way. It’s tough to assess whether and how much the online-grocery habit might stick.
The ballooning popularity of Bitcoin and other digital currencies has given rise to a strange new political breed: the crypto mayor. Eric Adams, New York’s mayor, accepted his first paycheck in Bitcoin and another cryptocurrency, Ether. Francis Suarez, Miami’s mayor, headlines crypto conferences. Now even mayors of smaller towns are trying to incorporate crypto into municipal government, courting startups and experimenting with buzzy new technologies like nonfungible tokens, or NFTS, to raise money for public projects.
Their growing ranks reflect the increasing mainstream acceptance of digital currencies, which are highly volatile and have fallen in value in recent days. The mayors’ embrace of crypto is also a recognition that its underlying blockchain technology — essentially a distributed ledger system — may create new revenue streams for cities and reshape some basic functions of local government.
“Mayors rationally want to attract high-income citizens who pay their taxes and impose few costs on the municipality,” said Joseph Grundfest, a business professor at Stanford. “Crypto geeks fit this bill perfectly.”
But as with many ambitious crypto projects, it’s unclear whether these local initiatives will ultimately amount to much. So far, most are either largely symbolic or largely theoretical. And the mayors’ aims are partly political: Crypto boosterism has a useful bipartisan appeal, garnering popularity among both antigovernment conservatives and socially liberal tech moguls.
“You can do these things because you want to be associated with dudes with AR-15S, or you want to be associated with
Meta,” said Finn Brunton, a technology studies professor at the University of California, Davis, who wrote a 2019 book about the history of crypto. “A lot of it is hype and hot air.”
In Jackson, Conger has become a frequent guest on crypto podcasts, where he is hailed as a leader in “the army of Satoshi,” a reference to Bitcoin’s shadowy founder, Satoshi Nakamoto. A broad-shouldered former college football player, Conger sometimes goes to work wearing socks emblazoned with tiny orange Bitcoins.
But his crypto ambitions have already encountered obstacles. While he’s close to establishing a system for city employees to invest a portion of their paychecks in Bitcoin, his mining proposal has proved impossible to institute under existing laws.
Conger wants to use public money to plug a bank of computers into the Bitcoin network, an energy-guzzling process that could generate new coins for the city. He has even found a place to put the hardware: a suite of rooms in City Hall that have remained unfinished since the building opened in 1998. But a state law limits the types of assets that cities can invest in, partly to protect residents from market volatility. Conger and other local officials are working on new legislation to add Bitcoin to the list of permissible investments.
In many ways, Conger is following in the footsteps of Miami’s Suarez, who has emerged as the crypto-bro-in-chief of mayors. (The two men occasionally text; Conger’s communications director calls it a “Bitcoin bromance.”) Suarez has positioned Miami as a “crypto capital” and thrown his support behind Miamicoin, a crypto token that anyone can buy or mine, with a portion of the proceeds flowing into city coffers. He recently jousted on Twitter with Adams of New York over which of them loves crypto more.
“Every time I would talk about crypto, my analytics would go through the roof,” Suarez, 44, said in an interview. “The analytics went crazy.”
Suarez now styles himself as a kind of crypto diplomat. After taking over as president of the U.S. Conference of Mayors, a nonpartisan coalition of city mayors, he urged members to sign a “crypto compact” calling on the federal government to eschew overly aggressive regulation of the industry.
Suarez’s vice chair at the Conference of Mayors is a fellow crypto enthusiast, Hillary Schieve, who’s in her second term as the mayor of Reno, Nev. Last year, she announced plans to turn a popular whale sculpture in downtown Reno into an NFT, a unique digital item that can be traded by crypto investors. The goal, Schieve said, was to funnel the profits into Reno’s arts scene.
“It would be great to cut out the middleman,” Schieve said of her embrace of crypto. “I’m not a big fan of banks.”
A decentralized city government built on blockchain technology has been a long-standing goal of crypto fans. Vitalik Buterin, one of the founders of Ethereum, the blockchain behind Ether, wrote a blog post on the topic in October. And last year, a group of crypto investors bought 40 acres of land in Wyoming, aiming to build a blockchain city run by a decentralized network of investors, each of whom would vote on important decisions.
The fervor has spread to smalltown America. Last year, Jalen Nelson, a 26-year-old crypto enthusiast, cold-emailed 2,000 U.S. mayors, hoping to engage them in discussions about blockchain technology. He got one response — from Chris Swanson, mayor of Two Harbors, Minn., a town of about 4,000 on the shore of Lake Superior.
Swanson was taken with the idea of forming a decentralized autonomous organization, or DAO — a collective of crypto investors — that would pool money to fund projects in Two Harbors in exchange for some kind of voting power over the new initiatives.
“Trying to get something built can be really complicated, and you end up going to the same pools of money over and over and over again,” said Swanson, 44. “The projects that the community wants to see could get done quicker.”
Nelson, who recently moved to San Antonio from California, has never set foot in Two Harbors, where winter temperatures can drop well below zero. (On a recent Zoom call, he chose a tropical background, with palm trees swaying in the breeze. “I told Chris I would visit him in the warmer months,” he said.) For now, the project remains entirely theoretical.
But with the mayor’s backing, Nelson is planning to establish a trust fund that would serve as the basis of the DAO. “I’m dreaming,” he said. “Two Harbors could turn into Disneyland.”