For supermarkets, it pays to offer both pickup and delivery for online grocery service.
Weekly online grocery sales for stores providing order pickup and home delivery were 44% higher than stores offering delivery only and 55% higher than stores offering pickup only, according to the Brick Meets Click eGrocery Performance Benchmarking 2021 Wave.
Overall, delivery represented more than 60% of all online orders from grocery stores, but that share fell to just over 50% when stores enabled customers to receive orders through either delivery or click-and-collect, Barrington, Ill.-based strategic advisory firm Brick Meets Click said Tuesday. Only 49% of stores offered a choice of delivery or pickup.
The findings reflect online transactional data linked to nonpersonal identified households across nearly 950 stores from 45 U.S. grocery retail banners, covering the 12 weeks ended Sept. 28, 2021. Sponsored by Mercatus, Hussmann Corp. and Cardlytics, the research resumes the benchmarking initiative that Brick Meets Click began in 2016 but paused in 2020 because of the COVID-19 pandemic. The study is the largest independently conducted online grocery benchmarking initiative completed to date, said Brick Meets Click, which focuses on how digital technology impacts food sales and marketing.
“We know from our monthly e-grocery shopping survey that mass [merchant channel] is driving the online grocery sales gains in the broader U.S. market,” David Bishop, partner at Brick Meets Click, said in a statement. “So benchmarking is incredibly valuable because it enables grocery retailers to compare their performance versus their peers to identify improvement opportunities.”
In the Performance Benchmarking analysis, Brick Meet Click found that age of online operations didn’t significantly affect grocery chains’ overall performance. For the 7% of locations operating online grocery service for less than a year, sales weren’t much lower than those of stores with longer-running operations. That was likely because of COVID-related circumstances, since sales and age of service showed a strong, positive correlation in benchmarking prior to pandemic, Brick Meet Click noted.
Another change versus the pre-pandemic period showed stores in midsize markets generating higher weekly sales than stores in more-populated trade areas. Brick Meet Click described the trend as a “significant flip” compared with the 2019 benchmarks, explaining that the change likely stems from expanded availability of competing online services in larger markets.
On a comparable-store basis, conventional supermarkets generated weekly online grocery sales of $18,164 per store on average in the 12 weeks through Sept. 28, down 6.8% year over year. Orders per store averaged 172 per week, a 3.1% decline versus a year ago, while order value averaged $106, down 3.9% from a year earlier.
Last week, Brick Meets Click reported in its monthly Grocery Shopping Survey, sponsored by Toronto-based grocery e-commerce provider Mercatus, that U.S. online grocery sales grew 3.5% in December and reached nearly $98 billion in 2021.
“As an equipment solution provider, our goal is to help the retail store and fulfillment center to excel at executing the strategy,” stated Dan Sullentrup, vice president of e-commerce at Bridgeton, Mo.-based Hussmann Corp. “The challenge is there’s no one simple solution, as there are many variables that need to be considered and vetted with the retailer’s overall strategy.”
The full results of the Brick Meets Click eGrocery Performance Benchmarking 2021 Wave will be released in a three-report series through mid-March. Part one, released today, focuses on top-line performance findings, including key causal factors such as how long a service has operated, which services are offered by each store and where stores operate. Bishop and Sullentrup are scheduled to follow up the part one report with a webinar on Feb. 3 at 1 p.m. CT.
Part two, focusing on key customer metrics, is slated for release in mid-February and and will examine measures ranging from acquisition and churn rates to buying patterns by customer cohort and more, with insight from Cardlytics. Coming out in mid-March will be part three on top-quartile analysis, focusing factors and issues that can show grocers how to further improve performance, with practical guidance from Mercatus.