Online grocery sales continue to climb along with customer expectations
Over 68 million households reported to order groceries online from a wide variety of providers in February '22, an 11% increase from February 2021. Total order frequency also beat last year's figures by 3%, with households completing an average of 2.73 orders per month.
Pickup, the largest segment of the online grocery market, grew 6% versus a year ago, generating $4bn in sales accounting for 47% of the total sales during the month.
Delivery reported a year-over-year gain of 37%, which equated to $3.2bn, capturing a 37% share of e-grocery spending, Brick Meets Click data revealed. Ship-to-Home, which was once held the largest share of the market accounting for 40% of the online grocery segment pre-COVID, is now the smallest, dropping to a 16% share since 2019 and down 24% year-over-year in sales to $1.4bn.
“New service providers, a broader range of retailers selling grocery-related products online, and services targeting faster cycle times contributed to delivery’s strong sales growth, but even so, more shoppers still prefer Pickup for a range of reasons that will benefit this service model going forward,” noted David Bishop, partner at Brick Meets Click.
The likelihood for an online grocery shopper to use the same service again within the next month was 62% for the month, climbing by more than 4% on a year-over-year basis, according to Brick Meets Click. Despite consumers' growing preference for purchasing their groceries online, customer expectations for service providers are also on the rise, noted Mercatus.
"Today, customer expectations for online grocery shopping are different than they were even a year ago, not to mention before COVID," according to Sylvain Perrier, president and CEO, Mercatus.
"To grow their online share of wallet going forward, conventional grocers need to find ways to better satisfy those changing expectations. Inflationary pressures suggest retailers should look at optimizing online meal planning, showcasing store brands, and encouraging repeat customers to take advantage of online loyalty discounts."
