U.S. online grocery sales totaled $8.1 billion in October, as KPIs stabilize.
Food prices may be anything but stable, as yesterday’s federal inflation report affirmed, but there are signs of a new normal in the omnichannel. According to a new Brick Meets Click/Mercatus Shopping Survey, key performance indicators (KPIs) are steadier in the digital space and are a sign of more permanent buying behaviors.
“As the number of new COVID-19 cases in October continued to decline, KPIs for monthly active users (MAUs), order frequency, and average order value are rebalancing from the record highs of 2020 and now provide a more stable and sizable base for building and forecasting the business in 2022 and beyond,” reported David Bishop, partner at the Barrington, Ill.-based Brick Meets Click.
The survey showed that about half of U.S. households purchased groceries online last month. The average number of orders placed by MAUs in October was 2.74, similar to previous months. That's about 35% higher than pre-pandemic levels, but 6% lower than at the peak of pandemic in spring 2020.
There is also some settling in shoppers’ online buying habits. The pickup/delivery segment continues to dominate, comprising $6.4 billion of the total $8.1 billion in digital sales during October. The ship-to-home segment is narrowing, with $1.7 billion in sales during the same time frame.
Still, grocers should recognize that shoppers do use different methods based on need and occasion. “While the vast majority of online grocery shoppers still prefer to use only one method – pickup, delivery or ship-to-home – over 30% of MAUs chose to use multiple methods to get their online grocery needs met in October 2021. And, the share of MAUs that received online orders via multiple methods has grown by over 16 percentage points since the start of the pandemic,” Bishop pointed out.
In terms of where they shop, the Brick Meets Click/Mercatus Shopping Survey revealed that 25.6% of users placed at least one online order with a mass merchandiser, roughly the same amount as September. Repeat intent rates for grocery stores trailed those for mass retailers like Walmart and Target by almost 4% in October; while that gap is shorter than the previous month, the finding illustrates the opportunity for grocers to improve customer satisfaction by reducing sources of friction in their service.
Sylvain Perrier, president and CEO of Mercatus, offered other advice to food retailers. “As we see online’s share of total weekly grocery shopping consistently hit the double digits, it represents a new normal,” he said. "A sound strategy for grocers going forward is continued investment to improve and differentiate your online service. Incentivize customers to shop your first-party channel while offering them choices for receiving online orders. Leveraging a third-party last-mile provider can make sense today for multiple reasons; however, it is essential that retailers take an integrated approach that promotes the benefit of ordering from the retailer’s owned experience.”
The Brick Meets Click/Mercatus Grocery Shopping Survey is an ongoing independent research initiative created and conducted by Brick Meets Click and sponsored by Mercatus. Brick Meets Click conducted the survey on Oct. 29-30, with 1,751 adults, 18 years and older, who participated in the household’s grocery shopping.