Online Grocery Shopping Starts to Decline

But the popularity of pickup orders keeps growing.

July 27, 2021

Curbside Grocery Pickup Service

ALEXANDRIA, Va.—U.S. consumers bought $6.8 billion worth of groceries online in June. That’s a 23% decline from the same period last year and down 3% compared to May 2021, reports GroceryDive.com.

Although 63.5 million U.S. households shopped online for groceries during the month, it was a 12% drop from June 2020. Pickup and delivery sales accounted for $5.3 billion, while ship-to-home sales accounted for $1.5 billion, according to the survey conducted June 27-28.

According to the latest information from Brick Meets Click, on ongoing independent research initiative, and Mercatus, a market research organization, a steep rise in use is continuing in pickup shopping. Among active users, the share of orders received through pickup grew nearly seven points year-over-year to 42%, while the share of delivery and ship-to-home orders dropped two and four points, respectively. For June, around one-third of active online users relied on pickup exclusively for online grocery orders, compared to 16% who only used delivery.

The overall usage rate for pickup in June was almost five percentage points higher than last year and more than 23 points higher than August 2019. Pickup also had the highest usage across all geographic markets covered in the survey, including large metropolitan areas. David Bishop, partner with Brick Meets Click, said pickup’s growing popularity in areas like large metropolitan area underscores the need to invest in innovation, better service and other improvements.

Bishop noted that mass merchants like Walmart and Target have become the closest online competitors for grocers, and that cross-shopping between the two formats is impacting consumers’ expectations for e-commerce service. 

Pre-pandemic, 15% of survey respondents reported ordering groceries from both mass merchants and grocers, and that percentage rose to more than 28% in June. Brick Meets Click’s survey included responses from 1,789 adults who participate in the household’s grocery shopping. 

Moreover, mass merchants have a repeat intent rate—indicating the likelihood that a monthly active user will order again from the same service within a month—that's almost nine points higher than grocers' rate.

Well-capitalized mass merchants like Walmart are investing in warehouse automation, plus shipping and loyalty programs, to attract more e-commerce shoppers. Grocers, meanwhile, are rolling out new services for pickup customers, including automated kiosks and lockers that store orders, plus technology that reduces waiting times for customers when they arrive to gather their groceries.

To read more about the challenges associated with e-commerce and last-mile services and what consumers expect from retailers, read “Covering the Last Mile” in NACS Magazine.

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