October U.S. online grocery sales show stabilization

(Graphic courtesy Brick Meets Click and Mercatus)

Produce executives can have a better sense of what online grocery shopping will be like in 2022 after an October survey shows some stabilization at higher levels than in pre-pandemic times.

During October, about 50% of U.S. households, or 63.8 million, bought groceries online, whether just a few items or a full basket of goods, according to ongoing research by Brick Meets Click and Mercatus.

“As the number of new COVID-19 cases in October continued to decline, key performance indicators for monthly active users, order frequency and average order value are rebalancing from the record highs of 2020 and now provide a more stable and sizable base for building and forecasting the business in 2022 and beyond,” Brick Meets Click partner David Bishop said in a news release.

Online shopping method

The study showed:

  • Pickup continued to be the most popular way to receive online orders in October, with a monthly active user base of 33.4 million households;
  • Ship-to-home’s monthly active user base had 29.8 million households but has contracted each month since July 2021; and
  • Delivery served 26.2 million households in October but has experienced more volatility in month-over-month changes lately. 

“While the vast majority of online grocery shoppers still prefer to use only one method – pickup, delivery or ship-to-home – over 30% of [monthly active users] chose to use multiple methods to get their online grocery needs met in October 2021,” Bishop said in the release. “And, the share of [monthly active users] that received online orders via multiple methods has grown by over 16 percentage points since the start of the pandemic.”

Of the $8.1 billion in sales generated by the U.S. online grocery market, $6.4 billion was from the pickup/delivery segment and $1.7 billion was from the ship-to-home segment.

The average number of orders placed by monthly active users in October 2021 was 2.74, holding steady over the last few months, according to the release. But this order frequency is still 35% above pre-COVID levels and nearly 6% below the record high set in May 2020 when market conditions were drastically different.

Researchers said these findings illustrate how buying behavior is stabilizing compared to 2020, and at elevated levels compared to before the pandemic.

Average order values, repeat customers

More evidence is apparent in average order values. Although October average order values were down across all the segments compared to 2020’s highs, pickup and delivery were 12% and 18% above pre-COVID average orders respectively, while ship-to-home has returned to pre-pandemic levels with just a 2% gain compared to August 2019.

There was a two-point uptick in the share of customers who used the most recent online grocery service for the first time, but only 30% of these first-time shoppers were very or extremely likely to order from that same service again, compared to 80% of shoppers who had placed four or more orders within the past three months with the same provider.

When comparing repeat intent rates between retail formats for October 2021, grocery retailers’ repeat intent rates lagged those of mass retailers such as Walmart and Target by almost 4%. This gap, while smaller than in September, signals that grocery retailers continue to have an opportunity to boost satisfaction by reducing sources of friction in their service. 

“As we see online’s share of total weekly grocery shopping consistently hit the double-digits, it represents a new normal,” Mercatus president and CEO Sylvain Perrier said in the release. “A sound strategy for grocers going forward is continued investment to improve and differentiate your online service.

“Incentivize customers to shop your first-party channel while offering them choices for receiving online orders,” Perrier said. “Leveraging a third-party last mile provider can make sense today for multiple reasons; however, it is essential that retailers take an integrated approach that promotes the benefit of ordering from the retailer’s owned experience.”


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