Coronavirus may be ‘inflection point’ for online grocery
Bill Bishop Interview 3-24
Accelerated adoption of online grocery services will likely be one of the outcomes of measures implemented to contain the new coronavirus COVID-19.
With schools and dine-in restaurants closed, gatherings banned, and work-from-home policies implemented wherever possible, many shoppers are also worried about going to the grocery store, and so they’re trying out pickup and delivery as a way to limit their exposure to other people.
Apptopia reported that Instacart, Walmart Grocery and Shipt all had record numbers of app downloads March 15. Instacart saw a 218% increase versus the average number of daily downloads, while Walmart Grocery and Shipt experienced increases of 160% and 124%, respectively. Online grocery platform Mercatus reports that its retailers have seen a 1,200% increase in online shopping account registrations and a 300% increase in mobile app downloads, compared to the previous month.
Bill Bishop, architect of consulting firm Brick Meets Click, observed that Chinese e-commerce giant Alibaba was formed during the SARS epidemic of 2002-2003. Brick Meets Click has been conducting research around online grocery adoption and has found so far that roughly 1 in 4 people who’ve ordered in the last 30 days were using the service for the first time.
What remains to be seen is how many of those new-to-the-platform shoppers will stick around based on their experience in likely the busiest extended period ever for U.S. grocers.
“The key to this is setting the right expectations,” Bishop said. “People have to understand that these are difficult times, and they need to be reminded of that — what that means in terms of the service being less than what it might otherwise be ... And when they hear the new expectations, ideally those expectations can be set so that the retailer has a chance of meeting or maybe even exceeding them in these difficult times.”
Setting quantity limits on certain items could also help improve experience through decreasing the likelihood of out-of-stocks, Bishop said. Another element retailers should consider is that many of their first-time online shoppers are likely older adults who may only use their cell phones for actual conversations with friends and family.
Brick Meets Click recently published a video of an older shopper trying out Instacart for the first time; her experience produced a list of ways retailers can improve the experience for that age group, which is also most likely to be worried about going to the store given their increased susceptibility to COVID-19.
Bishop mentioned that, as one example, H-E-B has an online shopping help line specifically for those customers.
When the crisis is past, it should be more clear than ever that online grocery shopping is something that will be a significant part of the business going forward.
“In my experience, a lot of operators have been hesitant to think that online grocery shopping is something that is going to be a really important aspect of their business in the future and for lots of reasons maybe not something they have to cope with as aggressively as they otherwise might,” Bishop said. “I think one of the lessons here is this will be an integral part of the grocery business going forward. It’ll probably be moving faster as a result of this crisis, and it’s going to be critically important that grocers learn how to make it profitable, or more profitable than it is right now.”
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