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Retail Industry Updates Supply Chain Industry Updates

This is How Big E-Commerce is Getting in Grocery

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While U.S. grocery delivery and pickup sales totaled $5.7 billion in August, average order value increased to a record high of $95 and intent to make a repeat online purchase in the next month reached 75% in a market that is nearly five times larger than it was just one year ago, according to the Brick Meets Click/Mercatus Grocery Shopping Survey fielded Aug. 24-26.

August sales were down 20% from their peak high in June, likely due to changing shopper attitudes toward COVID-19. The ongoing research has documented a steady decline in the percentage of households that express a high level of concern about contracting the virus, dropping from a high of 47% in April to 38% in August, according to the report.

“There is a common belief that the rapid and dramatic surge in sales caused by COVID-19, starting in mid-March, would recede at some point as stay-at-home orders and in-store shopping restrictions like occupancy limits, shortened hours and one-way aisles were relaxed,” said David Bishop, partner with Barrington, Ill.-based Brick Meets Click, a strategic advisory firm that focuses on how digital technology is changing food marketing and sales. “While the August results reflect a retrenchment of sorts, the market appears positioned to begin a new growth cycle with a large base of committed shoppers.”

According to the survey, about 37.5 million or 29% of all U.S. households were considered monthly active users of online grocery services in August compared to 16.1 million one year ago. This gain of around 21.4 million represents a 133% increase in the number of active households placing at least one delivery or pickup order during the past month.

On a year-over-year basis, monthly active online grocery shoppers are spending more per order and placing more orders per month according to the research. Spending per order rose to $95 in August — 32% higher than a year ago — and active shoppers placed 1.6 orders per month compared to 1.0 orders in August 2019.

Also during August, 75% of customers indicated they are extremely or very likely to use their most recent online grocery service providers again within the next 30 days, which highlights how improved retail conditions are leading to stronger shopping experiences.

“The rise in repeat purchases and spending means grocers are successfully acquiring new online shoppers, and equally as important, converting existing digitally engaged customers,” said Sylvain Perrier, president and CEO of Mercatus, a Charlotte, N.C.-based firm that specializes in grocery e-commerce. “Even with diminished concern about COVID-19, grocery shoppers are realizing the benefits of a streamlined and frictionless online shopping experience. Going forward, it’s critical that grocery executives focus their teams on rewarding online shoppers by delivering a differentiated e-commerce experience that caters to consumers’ high expectations.”

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