Online grocery sector booms with $7.2B in June sales
Does the trend have the staying power to outlast COVID-19?
The continued COVID-19 pandemic has created a massive amount of demand for online grocery shopping. Customers are turning to services that allow them to buy groceries remotely at record-breaking levels. Despite the fact that most lockdown measures are no longer in place, online grocery sales rose to a staggering $7.2 billion last month in the United States.
It’s clear that American consumers have adopted the digital grocery shopping mindset. The only question remaining is whether or not this trend will outlast the coronavirus pandemic.
Click and Go
Across the United States, the economy has slowly reopened over the past few weeks. It has led to a fresh surge in COVID-19 cases with some areas being hit harder than others.
However, that hasn’t affected the online grocery shopping sector. According to data from Brick Meets Click and Mercatus, June’s $7.2 billion in sales set a record. It also marks a nine percent increase over May’s figures. The firms note that 45.6 million households utilized online grocery pickup or delivery services last month.
Even more impressive is the fact that online grocery sales hit a then-record $4 billion in sales back in March-when the U.S. first went on lockdown. Since then, online grocery sales have grown rapidly and steadily. They rose to $5.3 billion in April and $6.6 billion in May.
The increase in sales isn’t just because people are using online services more frequently, though. The sector has continued adding new customers, growing by more than 15 percent since March. To put things in perspective, 16.1 million customers used online grocery services in August 2019. Back then, the sector tallied just $1.2 million in sales.
Of course, some of its recent growth is simply due to the fact that customers are placing more orders. Instead of only using online services for larger “stock up” trips, they are utilizing delivery and pick-up options for smaller orders as well. The new research shows that online order frequency is up from 1.7 orders in May to 1.9 orders in June.
Staying Power?
Due to the growing popularity of online grocery ordering, retailers have rapidly scaled their capacity for order fulfillment. Nationwide chains and local shops are adapting to meet the changing needs of consumers amid the pandemic.
Back in March, it was almost impossible to find a pick-up or delivery time slot. Now, customers can get their orders at practically any time.
Still, it isn’t a guarantee that consumers will continue using these services once the pandemic subsides. More than 44 percent of customers said that their primary fear is contracting the coronavirus. With a vaccine on the horizon, those fears could be drastically reduced by this time next year.
In the meantime, retailers will need to offer new and attractive online ordering features to convince customers to keep utilizing them once the pandemic ends.
“The new reality of increased capacity across the market — and related greater choice (or options) for shoppers — means that all grocery retailers will need to accelerate their efforts to make shopping online even more seamless to thrive going forward,” says David Bishop, research lead at Brick Meets Click.
It’s worth watching how this sector reacts in the months to come. If COVID-19 continues to remain at the forefront of everyone’s minds (as it likely will) it wouldn’t be surprising to see online grocery sales rising even higher.
Originally published at https://www.theburnin.com on July 8, 2020.
