Despite a double-digit decline in ship-to-home business, U.S. online grocery sales and order volume remained elevated in September, new research from strategic advisory firm Brick Meets Click reveals.
The U.S. online grocery market totaled sales of $8 billion for September, down 7% from $8.6 billion August but holding at about the same level as a year ago, according to the latest Brick Meets Click/Mercatus Grocery Shopping Survey, released Wednesday.
Delivery and pickup sales dipped 3% from $6.6 billion in August to $6.4 billion in September yet grew share from nearly 77% to 80% of online grocery sales. Meanwhile, ship-to-home sales — online grocery purchases delivered via parcel couriers like Federal Express, UPS and the U.S. Postal Service — fell 15% from $2 billion in August to $1.7 billion in September, with share shrinking from approximately 23% to 20% of sales.
In September, 64.1 million — roughly one out of two U.S. households — purchased groceries online, down 7.1% from 69 million in August but 16% higher than a year earlier, Brick Meets Click said. The combined base of monthly active users (MAUs) for pickup/delivery grew over 33% over the past year, whereas the ship-to-home user base shrank more than 12%.
Weighted average spending per order across all three fulfillment methods came in at $69.65 in September, down 12% from August 2020 yet still 19% higher than in August 2019, before the COVID-19 crisis. Since then, average order values (AOVs) for pickup/delivery have climbed 14% versus a 3% decrease for ship-to-home.
The study, conducted Sept. 28 and 29 by Brick Meets Click and sponsored by grocery e-commerce specialist Mercatus, polled 1,728 U.S. adults who participated in their household’s grocery shopping and made an online grocery purchase in the previous 30 days. Based in Barrington, Ill., Brick Meets Click focuses on how digital technology impacts food sales and marketing.
“The combined pickup and delivery segment now captures nearly 80% of sales in the U.S. e-grocery market, and pickup hit a record-high portion of total sales in our September research wave, underscoring its critical role in a grocer’s strategy,” observed David Bishop, partner at Brick Meets Click.
MAUs placed an average of 2.76 online grocery orders in September, upholding the 2.66 to 2.83 average orders range since January 2021, well above the pre-pandemic level of 2.03 in August 2019, Brick Meets Click noted. Pickup and delivery continue to gain order share, expanding to 67% in September from 56% in August.
“Both the lift in order frequency and the shift to delivery/pickup as a receiving method illustrate how the pandemic has changed the way a sizable number of consumers shop for groceries,” Bishop noted.
In the grocery retail channel, the share of MAUs who also placed at least one online order with a mass merchant in September rose almost eight points to 25.7% compared with the level roughly a year earlier. Brick Meets Click said the share of online grocery MAU cross-shopping with mass retailers has hovered between 24.3% and 28.7% monthly since January, indicating that mass chains stand as supermarkets’ primary competitors in the e-grocery arena.
Repeat intent rate — the likelihood that an MAU will order again from the same online grocery service in the next month — edged up a point-and-a-half to 61.4% in September from August. However, that rate is over 13 points less than the year-ago level, reflecting higher consumer concerns about COVID-19 that spurred online grocery usage at the time, according to Brick Meets Click.
Across retail formats, the repeat intent rate among grocery stores trailed that of mass merchants like Walmart and Target by 3.5 percentage points, or almost 6%. Brick Meets Click said the shortfall marks an opportunity for supermarkets to raise customer satisfaction by smoothing friction points in their online grocery shopping experience.
“Conventional grocers need to take a closer look at their local market dynamics to understand how well they are performing online,” explained Sylvain Perrier, president and CEO of Toronto-based Mercatus. “The mass merchandisers continue to set the pace and define the standard for digital grocery against which other retailers’ services are increasingly evaluated. Now more than ever, it’s essential for grocery retailers to align their operational processes with a best-in-class customer experience to retain a competitive edge.”