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BusinessE-commerce & FulfillmentModern ShipperNewsRecent News

Online grocery shopping shows decline in February

Fewer Americans ordered online, but the size of orders increased

Online grocery shopping showed a decline in February, although the delivery/pickup segment of the market continued to show strength according to new data.

The latest Brick Meets Click/Mercatus Grocery Shopping Survey found that online grocery sales in February fell 14% from January to $8 billion. The delivery/pickup segment captured $6.1 billion of sales with ship-to-home accounting for $1.8 billion, the survey said. January recorded $9.3 billion in total sales with $7.1 billion in delivery/pickup.

“February’s overall sales contraction was expected,” David Bishop, partner of Brick Meets Click, a grocery tracking firm, said. “While January’s sales performance set a record high for online grocery sales, we also saw January’s shopper sentiment related to completing a grocery delivery or pickup order within the next month drop by approximately 10%, and that is what happened, albeit at a slightly higher rate, in February.”

The survey was conducted Feb. 26-28.

The survey found that fewer households purchased online in February, falling from 69.7 million in January to 60.1 million in February. Much of that drop came in the over-60 age group, the survey found, suggesting that as COVID-19 restrictions ease, this age group may return in higher numbers to in-store shopping.

Online grocery shoppers placed 6% fewer orders in February, averaging just 2.7 orders per person in the month. But the average order value increased 4% in February on a month-over-month basis. Households spent an average of $82 per order for pickup and delivery orders. Ship-to-home orders AOV increased 11%.

(Chart: Brick Meets Click/Mercatus)

“As households become more familiar with the range of online grocery shopping options, their experiences are altering their expectations and perceptions about the value of shopping this way,” the survey noted.

Asked whether they were likely to use a specific service again, 58% of respondents said they were extremely or very likely to do so within the next 30 days. More than 40% of first-time delivery service users reported they were extremely or very likely to use the service again. First-time pickup service users, though, reported less satisfaction, with just 30% reporting they were extremely or very likely to use the service again.

“These scores are concerning as pickup is only becoming more vital to brick-and-mortar retailers for both strategic and economic reasons,” said Bishop.

“For many regional grocery chains, the online shopping battleground has shifted from delivery to curbside,” said Sylvain Perrier, president and CEO of Mercatus. “Lower repeat intent rates for first-time pickup customers puts the spotlight squarely on customer service. Implementing a frictionless curbside fulfillment experience that wins the customer the first time, every time will help grocers defend against mass merchants’ low-price advantage. Enhanced pickup services combined with retailer branded marketing strategies to win back lapsed and lost customers can help increase monthly order frequency and contribute to a healthy contribution margin from online shopping.”

Click for more Modern Shipper articles by Brian Straight.

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Brian Straight, managing editor, Modern Shipper

Brian Straight leads FreightWaves' Modern Shipper brand as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and fleetowner.com. Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler. You can reach him at bstraight@freightwaves.com.