The ongoing COVID outbreak will cause a lasting step change in grocery ecommerce.
Article by Andrew Lipsman — eMarketer
With the impact of the coronavirus pandemic still ricocheting throughout the US economy, it can be difficult to envision retail returning to normal one day. And yet somehow it will—and much of it will look virtually indistinguishable from the pre-crisis reality. But changes in consumer behavior will be lasting.
Aside from the many brick-and-mortar retailers watching foot traffic and sales drop to near zero, the most profound shift in consumer behavior is happening in grocery ecommerce—and this shift is likely to have one of the longest-lasting consequences.
According to our most recent ecommerce forecast (prior to COVID-19), we expected US food and beverage ecommerce sales to rise 23.4% to $32.22 billion this year, with the segment accounting for just 3.2% of total retail sales. It is both the fastest-growing and least penetrated ecommerce category—and expect that these figures will be revised upward in the coming months.
Grocery ecommerce has had huge momentum behind it—even prior to much of the US population social distancing and staying home—with last year representing an obvious inflection point. According to TABS Analytics, 2019 was a year of hockey-stick growth for both initial trials and increasing frequency of online grocery ordering. Overall penetration among US internet users jumped from 38% in 2018 to 56% in 2019, while the percentage of those who regularly ordered groceries online spiked from 17% to 37%.
Online logistics are also continuing to improve. Amazon’s investment in warehouse and last-mile logistics for next-day and same-day Prime (not to mention removing its $14.99 monthly fee for Amazon Fresh) eliminated barriers to online grocery delivery. The buildouts of click-and-collect operations by Walmart and various national grocery chains helped propel that behavior forward.
The flame was already lit, but the coronavirus crisis has clearly poured gas on the fire. According to Rakuten Intelligence, order volume for online grocery retailers surged 210% from March 12 to 15, compared with the same period in 2019. Showing similar trends, NetElixir reported that online food sales surged 183% between March 1 and 25, vs. the same period last year.
In a CivicScience poll of US adults and their digital grocery shopping habits, the percentage of those who said they increased their online grocery shopping jumped from 11% to 37% from March 1 to 22.
