The Rapid Digitization of Grocery Shopping
How the inevitable shift in eCommerce has left grocers to re-strategize their online presence
Online grocery shopping may be old news to retailers and the broader consumer community; however, the current pace of investment and innovation is quite unprecedented.
Not that long ago, neighborhood grocery stores were considered one of the last segments of retail to resist the dramatic shift to eCommerce that significantly reduced traffic and sales at brick and mortar stores. The present climate and state of our world has impacted consumer behavior in ways that seem to be changing radically.
In the wake of the pandemic, over 40% of U.S. online grocery sales came from first-time users. This shift in the business environment that we expected to take as many as five years, instead occurred in five short months.
The COVID-19 induced change in consumer’s grocery shopping behavior is startling. Every major supermarket chain in the U.S. has reported three all too similar results:
- In-store customer visits are fewer
- In-store sales are way up
- eCommerce sales are way, way up
Consider the most recent quarterly numbers from the three largest pure play grocery retail operators in the country:
Kroger which operates 2,800 supermarket across the U.S. (including Dillon’s and Gerbes in the Midwest) saw identical store (ID) sales increase 15% from prior year, while eCommerce jumped 127%.
Albertsons, operator of 2,250 national supermarkets, reported ID sales increased 14% while eCommerce skyrocketed 243%.
Ahold Delhaize, operator of 2,000 supermarkets in the Northeast, had a 16.5% increase in ID sales and a 115% increase eCommerce.
Yet all three reported decrease in number of in person shopping visits.
“We are seeing customers continue to come to our stores less often, but they are buying much larger baskets, including new categories as we fill their one-stop shopping needs.” Vivek Sankara, Albertsons CEO said. “Many have chosen to use our eCommerce offerings, both home delivery and curbside pickup, and overall have increased their household spending with us. This enduring secular shift in shopping habits is confirmed daily, despite the economy opening in most parts of the country.”
