No Ceiling in Sight for Grocery Pickup, Delivery?
E-commerce continues to grow, with online grocery sales reaching $7.2 billion in June, a 9% increase over May. Delivery and pickup have been accelerating quickly since the COVID-19 pandemic began, with May sales up 24% compared to April and April sales up 37% compared to March.
These numbers are all according to the Brick Meets Click/Mercatus Grocery Survey fielded monthly. In June, 45.6 million households used delivery and pickup services, and order frequency grew from 1.7 to 1.9 orders per month.
One of the primary reasons for sales growth in June could be additional online fulfillment capacity across the market as more retailers, especially independents, launched services, and others added labor or improved pick productivity via tech solutions.
“Many grocery retailers have demonstrated amazing agility since the health crisis started, building surge capacity to better meet the astronomical growth in demand for shopping online,” explains David Bishop, partner and research lead, Brick Meets Click. “This increase in online grocery capacity has flipped the equation. Today as shoppers have more choice, the increased capacity is now actually enabling the continued growth of online grocery.”
Those over the age of 60 also played a role in the growth, with a 9% increase among shoppers in this age group in June. Respondents were more concerned about someone in their household contracting COVID-19, up from 42% in May to 44% in June.
Customer satisfaction, however, remains low. Only 57% of shoppers are likely to use a specific online grocery service again within the next 30 days, down from 74% in August 2019, well before the coronavirus was widespread in the United States.
“As grocers adopt or adapt eCommerce offerings to meet shopper demand, it’s imperative that they consider the entire customer journey in order to capture repeat shoppers,” said Sylvain Perrier, president and CEO, Mercatus. “When evaluating potential eCommerce platform providers, grocers must assess the complete ecosystem of partners and their capabilities, from digital advertising to picking and fulfillment, and the impact of those relationships. Grocers should look to partners who help them retain shoppers and increase revenue with each of these capabilities, rather than diluting their brand and bottom line at every customer touchpoint.”
Brick Meets Click conducted the June research on June 24-25, 2020, via online survey of 1,781 adults who participated in the household's grocery shopping.