ALEXANDRIA, Va.—For most consumers, picking up pre-ordered groceries is something they do infrequently. But for 50% of millennials, the grocery pickup option is a convenience they’re using at least once a week, reports GroceryDive.com.
According to Acosta, the sales and marketing company, millennials also spend the highest percentage of their grocery budget (40%) online. They’re followed by Gen Z (37%) and Gen X (32%). Time-crunched millennial parents seem to love pickup. According to Acosta, 44% of households with children use the service, while just 15% of those without kids use it.
Almost half of all online grocery shoppers get their orders fulfilled via pickup, and 26% get groceries delivered. The average shopper does 32.7% of their grocery spending online, the report found. Despite the available service, 54% of all pickup shoppers say they still visit a brick-and-mortar store weekly to purchase 10 products or more, and 45% go to purchase less than 10 products.
To appeal to a broad range of online shoppers, grocers have enhanced their mobile apps and introduced financial incentives and services to make pickup more convenient. Walmart offers free pickup and price-matches of the store’s assortment. That’s an expensive proposition but one that's attracting new customers. This month, both SpartanNash and Lowe’s Food announced that they're using GPS location technology to track each customer’s journey to the store so that the order is ready on arrival.
The research suggests there are other ways to attract pickup shoppers. For example, 64% of millennials say they use retailers' online recipes for inspiration and to build their shopping lists—at least sometimes. A growing number of grocers are utilizing shoppable recipes. Being able to track spending is also important, with 37% saying it is extremely important in making an online grocery service appealing.
Acosta estimates that total online grocery sales will triple to $74 billion by 2023. The report found that despite shoppers' inconsistent use of grocery pickup, 30% plan to utilize the service more frequently in the future, and retailers are preparing for this. Walmart, Target, Instacart and a host of regional grocers are making click-and-collect available nationwide.
As reported in NACS Daily earlier this week, Instacart predicts that 2020 is the “year for grocery pickup”.
“Our pickup product is also becoming a significant revenue contributor for our retail partners, growing customer basket size[s] by an average of 15% and accounting for an average of 20% of a retailer's total Instacart store sales,” said Nilam Ganenthiran, president of Instacart.