Online grocery sales for home delivery and store pickup in April 2020 reached a new record of $5.3 billion for a 30-day period which represents a 37% increase over March sales, according to the latest Brick Meets Click/Symphony RetailAI Online Grocery Survey conducted April 22-25. The research is part of Brick Meets Click’s monthly monitoring of COVID-19’s impact on online grocery. This significant month-over-month sales growth for April was driven by a combination of factors.
First, a 33% increase in the total number of online orders made per month, and second, a 3% increase in order size from $82 to $85 as households continue to stock up on essential products. The number of active online grocery shoppers who received a home delivery or store pickup order grew slightly more than 1% versus the previous month, bringing the total number of US households shopping online for groceries to about 40 million for April. These online shoppers placed an average of 1.6 orders for either delivery or pickup during the past 30 days compared to 1.2 orders during March. Shopper satisfaction improved only slightly during the month based on the likelihood to shop from the same service provider again.
In April 50% of households said they were likely to shop the same provider again compared to 47% in March. This reflects the reality that current shopping experiences are still challenged by out-of-stocks and limited availability for pickup and delivery time slots as demand continues to outpace capacity. The April research provides fresh insights into the motivators contributing to the observed changes in shopping behavior related to home delivery or store pickup of grocery orders, both in the present and likely into the near future.
• Fear of contracting the coronavirus - 47% of all the households surveyed reported a high level of concern about getting the virus.
• Recent loss of income - 39% of all respondents reported a 25% or greater drop in their monthly income compared to the January/February 2020 time period.
This represents an estimated 49 million households, a number that goes well beyond unemployment figures since many of these people still have work, but they are just earning less.
"These two factors are particularly important for retailers to understand,” says David Bishop, partner at Brick Meets Click. “The level of concern that customers have about health affects how they choose to shop – online or in-store – and the loss of income impacts where consumers shop and what they buy."
The new Brick Meets Click/Symphony RetailAI study delivered some good news along with a challenge for brick and mortar retailers offering delivery and/or pickup services to their customers. The results found that 26% of the households that had not bought groceries online in the last 30 days said they were extremely or very likely to try online shopping in the next 3 months.
“The ongoing shifts in spending mean that retailers will need to work carefully in applying historical sales data to forecast future sales, if they are going to be accurately aligned with shoppers,” said Kevin Sterneckert, Chief Marketing Officer of Symphony RetailAI. “True demand, which includes lost sales and other characteristics beyond transactions at the register, is crucially important here. Today’s retail Winners will be those that best understand their customers and can meet and exceed their expectations the fastest.”