Online grocery sales stabilize as market enters new growth cycle with ‘large base of committed shoppers’

By Mary Ellen Shoup contact

- Last updated on GMT

©GettyImages / rfranca
©GettyImages / rfranca

Related tags: Brick Meets Click, Online grocery, COVID-19, coronavirus

Driven by shifting shopper attitudes toward COVID-19, overall grocery delivery and pickup sales for August were down to $5.7bn from June’s peak of $7.2bn. However, some key performance indicators including average order value and intent to make a repeat purchase in the next month hit record highs, according to new Brick Meets Click research.

 “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, Brick Meets Click​.

“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.”

Approximately 37.5 million, or 29% of all US households, are considered monthly active users of these services in August 2020 compared to 16.1 million one year ago, representing a 133% increase in the number of active households placing at least one delivery or pickup order during the past month, according to the firm's research.

The Brick Meets Click/Mercatus Grocery Shopping Survey fielded August 24-26, 2020* found that while total grocery delivery and pickup sales declined by roughly 20% between June and August, the average order value increased to a record high of $95 – 32% higher than a year ago – and active shoppers placed 1.6 orders per month compared to one order in August 2019.

Intent to make a repeat purchase in the next month also increased significantly to 75% (of customers who indicated that they are extremely likely or very likely to use their most recent online grocery service provider) compared to 57% in June 2020.

“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, Mercatus.

“Even with diminished concern about COVID-19, grocery shoppers are realizing the benefits of a streamlined and frictionless online shopping experience.”

'Customers’ expectations will grow even higher'

While grocery retailers may be experiencing increased foot traffic as consumers become less worried about contracting COVID-19, it will be critical for retailers to continue to focus their teams’ efforts on rewarding online shoppers and delivering a differentiated e-commerce experience that caters to consumers’ high expectations, added Perrier.

“What’s also evident is that customers’ expectations will grow even higher, making it critical for retailers to continue improving the entire shopping experience,” ​noted Bishop.

According to Bishop, retailers can make the grocery shopping experience more enjoyable for shoppers by encouraging customers to shop online as well as in-store.

“Even now, only a minority of households buys groceries online, so every retailer has the opportunity to promote the convenience of online shopping to the majority of its customers. This also has the advantage of building loyalty with the best customers, since dual shoppers spend more than those who shop exclusively online or in-store,”​ he said.

* Brick Meets Click conducted the survey on August 24-26, 2020 with 1,817 adults, 18 years and older, who participated in the household’s grocery shopping using a similar methodology in terms of design, timing, and sampling for each of the surveys conducted throughout 2020: June 24-25 (n=1,781), May 20-22 (n=1,724), April 22-24 (n= 1,651), and March 23-25 (n=1,601). 

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