Online Grocers: Offering Both Delivery and Pickup Could Double Your Ecommerce Success in 2019

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Online Grocers: Offering Both Delivery and Pickup Could Double Your Ecommerce Success in 2019

12/21/2018
Online Grocers: Offering Both Delivery and Pickup Could Double Your Ecommerce Success in 2019
Retailers offering both delivery and click-and-collect services can double their ecommerce growth, retail consultancy Brick Meets Click has found

While online grocery spending is poised for 15 percent growth in 2019, grocers that offer both delivery and click-and-collect options are anticipated to see up to double that growth in the new year, according to new research from Barrington, Ill.-based retail consultancy Brick Meets Click.

Providers that offer both delivery and pickup are expected to grow their online sales between 25 percent and 30 percent, the research noted. But while the forecast indicated that a larger share of online spending for groceries will shift toward the brick-and-mortar retailers offering these services, the gains won't be evenly distributed, as winning more sales depends largely on how well providers are improving the shopping experience.

Compared with households that grocery shop via Amazon, ones that use an online grocery delivery or click-and-collect service place more frequent orders (1.9 versus 1.6 per month) and spend considerably more per order (average of $105 versus $46). This equates to households spending nearly three times more with a delivery or pickup service, compared with Amazon, on a monthly basis ($200 versus $74, respectively).

A major factor driving the shift toward delivery and pickup grocery services is improving access to the services. Although any U.S. household with internet access has been able to buy from Amazon for many years, Brick Meets Click found that in 2017, only 69 percent of the addressable U.S. market had access to at least one home delivery or pickup service for their online grocery orders. Since then, though, national, regional and local food retailers have continued to invest heavily in capabilities and aggressively roll out services: In 2018, 81 percent of households had access, a number anticipated to hit 90 percent next year.

"Increasing the number of households who have access to online grocery shopping services with home delivery or pickup could add almost two points to the percentage of U.S. households who buy groceries online, pushing the 2019 monthly rate past 25 percent at the national level," explained David Bishop, partner at Brick Meets Click. "At the same time, this will offer a meaningful boost to particular providers in those market areas, as we expect that most of the sales generated by new households going online for groceries will flow toward the brick-and-mortar delivery or pickup providers."