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For grocers, pandemic leads to an online explosion

With a staggering surge in demand for online grocery, retailers are growing and improving their services

8 Min Read
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Whole Foods workers prepare an online grocery order for delivery at a store in midtown Manhattan that has been converted to online-only.Whole Foods Market

Home delivery and store pickup online grocery sales reached a new 30-day record in April, hitting $5.3 billion and marking a 37% increase from $4 billion in March, according to a Brick Meets Click and Symphony RetailAI Online Grocery Survey.

Strategic advisory firm Brick Meets Click said the month-over-month sales growth reflects a 33% increase in the monthly number of online orders, from 46.9 million to 62.5 million, plus a 3% gain in order size — from $82 to $85 — as households continued stock-up purchases of essential products. The Brick Meets Click/Symphony RetailAI poll was conducted April 22 to 25.

Customer satisfaction with online grocery service also edged up in April. For the month, 50% of households said they were likely to shop from the same service provider again, compared with 47% in March. Brick Meets Click said that result indicates current shopping experiences are still impacted by out-of-stocks and limited availability for pickup and delivery time slots, as COVID-19-driven demand outpaces capacity.

The study results also revealed more potential for the growth of online grocery business. Twenty-six percent of households that hadn’t bought groceries online in the last 30 days said they were extremely or very likely to try online shopping in the next three months.

Related:Kroger ‘Blueprint for Businesses’ offers cross-industry coronavirus action plan

While this is good news for brick-and-mortar retailers offering grocery delivery and/or pickup services, it also represents a challenge, noted Kevin Sterneckert, chief marketing officer at Dallas-based Symphony RetailAI.

“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,” Sterneckert said. “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.”

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Kroger has hired more than 100,000 workers since the pandemic began, with many filling positions in online grocery fulfillment, pickup and delivery.

Facing the labor challenge

Since the onset of the coronavirus pandemic, grocery retailers have been ramping up their labor forces, much of that focused on the online sector — which includes in-store fulfillment, delivery drivers and pickup associates. Walmart — the nation’s largest retailer, with more than 1.4 million workers— has hired more than 200,000 associates in its stores, clubs, distribution centers and fulfillment centers, since March 19. Meanwhile, Kroger, the nation’s largest grocery chain, announced in mid-May that it has hired more than 100,000 workers over the past eight weeks — including displaced workers from hard-hit business sectors such as restaurants, hotels and foodservice distributors — and expanded its overall work force to more than 560,000 associates. 

Related:How the coronavirus crisis is changing grocery shopping

While every grocery chain has had to increase hiring across the board, the impact of demand on digital grocery might best be seen at Instacart, where the third-party online grocer is moving quickly to try and keep pace with the unprecedented demand via a major hiring push. In March, the company announced plans to hire 300,000 new full-service shoppers and met that goal just weeks later, enlarging its shopper community to more than 500,000 people. At the end of April, Instacart announced it was adding 250,000 more new full-service shoppers, which would bring its total work force up to 750,000.

“Our teams are working tirelessly to launch new products that speed up our service and open up more delivery windows for customers. We’re committed to getting back to one-hour and same-day delivery speeds,” said Apoorva Mehta, founder and CEO of Instacart, referencing some of the delivery delays and slotting challenges the company faced at the outset of the pandemic. “In order to do that, we’re continuing to grow our shopper community to meet the surge in customer demand.”

Serving at-risk customers

As the coronavirus outbreaks and community lockdowns surged in March, retailers immediately were able to pivot to contactless grocery delivery to make the online grocery experience safer for both customers and drivers. Since then, retailers have continued to add enhancements to their services, particularly paying attention to the needs of at-risk or vulnerable customers.

As grocery stores nationwide quickly began providing dedicated in-store hours to customers 65 or older, pregnant, or vulnerable to COVID-19 in other ways, they also began to extend those services online.

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Since the pandemic began, Whole Foods has reserved the first hour of grocery pickup at stores nationwide for customers age 60 and older as well as those with disabilities.

Whole Foods Market, for instance, is now holding a spot in line for seniors and others vulnerable to coronavirus who place online grocery pickup orders. The Amazon-owned retailer now reserves the first hour of grocery pickup at stores nationwide for customers age 60 and older as well as those with disabilities and whom the Centers for Disease Control and Prevention (CDC) classifies as high-risk for the virus. The new pickup feature is now available at more than 150 of the company’s nearly 500 stores, and is continually being rolled out to more. As of mid-March, all Whole Foods stores in the United States and Canada have designated the first hour of operation for shopping by older and high-risk customers.

Midwest retailer Hy-Vee is reserving one hour of Hy-Vee Aisles Online shopping time slots each day for customers who are considered “high-risk” during the COVID-19 pandemic. The reserved time slots run from 7 a.m. to 8 a.m., seven days a week, which coincides with the in-store hours reserved for customers. Throughout April, in partnership with delivery platform DoorDash, Hy-Vee also offered free grocery delivery to up to 20,000 high-risk customers.

Express delivery and pickup

As retailers quickly made adjustments to their online business to meet overwhelming demand, they also took steps to improve the overall online grocery experience. Following a recent pilot program, Walmart is now rolling out Express Delivery, a new online service offering home delivery of a wide range of groceries and other products from the store in less than two hours.

Walmart had been testing Express Delivery at 100 stores since mid-April, accelerating development of the service because of the coronavirus pandemic. Plans call for the fee-based service to reach nearly 1,000 stores in early May and then almost 2,000 stores in the ensuing weeks.

“We know our customers’ lives have changed during this pandemic, and so has the way they shop,” said Janey Whiteside, chief customer officer at Walmart. “We also know when we come out of this, customers will be busier than ever, and sometimes that will call for needing supplies in a hurry. COVID-19 has prompted us to launch Express Delivery even faster so that we’re here for our customers today and in the future.”

Walmart said Express Delivery leverages its team of 74,000 personal shoppers — including additional shoppers hired specifically for the new service — to pick customers’ orders. The Bentonville, Ark.-based retail giant added that it will tap its current roster of delivery providers to bring orders from a store to customers’ doors.

Express Delivery expands the availability of pickup and delivery slots, giving customers more flexibility to shop when and how they want.

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H-E-B has expanded its online grocery options with the launch of Favor Express Delivery service, which offers delivery in two hours or less.

Texas favorite H-E-B has expanded its online grocery options with the launch of Favor Express Delivery service, which allows shoppers to order grocery essentials online and have them delivered to their home in two hours or less from any H-E-B, Central Market or Joe V’s store in Texas. The fast-track service from Favor, H-E-B’s e-commerce subsidiary, carries no minimum order requirement or membership fee.

Customers can order up to 25 items from a selected list of groceries and essentials — such as dairy, meat, produce and beer and wine, among other items — and customize their desired sizes and quantities, H-E-B said. A Favor delivery driver, known as a “Runner,” will contact the customer if any product substitutions are necessary.

All deliveries will be left at the customer’s doorstep, enabling a contactless experience in line with social distancing guidelines, H-E-B noted. Customers will receive a notification when their order has been delivered.

“This new service is another way H-E-B and Favor are working together to respond to unprecedented demand during this crisis to get Texans the essentials they need, when they need them,” said Jag Bath, H-E-B chief digital officer and Favor CEO. “We continue increasing H-E-B Curbside and Home Delivery availability for customers who want to place orders in advance for same day, next day or later. And now, with Express Delivery, Texans can get two-hour delivery on up to 25 items when they need an immediate option.”

Hy-Vee is also offering a “Get It Faster” option on its Aisles Online time slots where a two-hour pickup option is offered. A limited number of two-hour pickup orders will be available for $9.95, from 8 a.m. until 8 p.m. daily, at all Hy-Vee stores providing Aisles Online service.

“Hy-Vee’s new two-hour pickup option will give Hy-Vee customers a chance to get the grocery items they need faster than ever before,” said Tom Crocker, senior vice president of e-commerce. “This option, along with increasing our number of available Aisles Online time slots, will only continue to add to the exceptional level of customer service we’re able to provide.”

For our most up-to-date coverage, visit the coronavirus homepage.

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About the Authors

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

Michael Browne

Executive Editor, Supermarket News

Michael Browne joined Supermarket News in 2018 after serving in managing and executive editor capacities at leading B2B media brands including Convenience Store NewsLicense Global and Travel Agent. He also previously served as content production manager for print and digital in the Business Intelligence division of Informa, parent company of Supermarket News and Nation’s Restaurant News.

As executive editor, Mike oversees the editorial content of supermarketnews.com as well as the monthly print publication. He also directs all content-based brand-related projects including the annual Top 75 Retailers report, Category Guide, Retailer of the Year, research surveys and special reports, as well as podcast and webinar content. Mike has also presented and moderated at industry events.

In addition to the positions mentioned above, Mike has also worked as a writer and/or editor for special projects at American Legal Media (ALM), managing editor for Tobacco International, special projects editor at American Banker • Bond Buyer, and as production editor for Bank Technology News and other related financial magazines and journals published by Faulkner & Gray.

A graduate of Fordham University, Mike is based in New York City, where he was born and raised.

Contact Mike at [email protected] or follow him on Twitter and LinkedIn.

 

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