What’s the state of online grocery?

Digital sales grow steadily as retailers become more adept at e-commerce

 

Russell Redman, Supermarket News 

Sep 18, 2019

 

Though a small slice of total food retail sales and shopping occasions, the online channel is steadily garnering more grocery dollars as more consumers opt to make purchases digitally and delivery/pickup services become more widely available, new research shows.

 

At the same time, however, grocery retailers are still working out the profitability equation and operational issues in online grocery fulfillment, as well as trying to rationalize the technology investment, studies revealed. Some retailers, too, have proved more adept than others in e-commerce execution.

 

This year, online grocery sales have climbed more than 15% year over year and now represent 6.3% of overall grocery-related spending by U.S. households, according to Brick Meets Click.

 

In its latest analysis of the U.S. e-grocery market, the Barrington, Ill.-based strategic advisory firm found that online grocery household penetration, based on past-month shopping activity, has increased more than five percentage points from last year to almost 25% of all households. The uptick stems primarily from rapid expansion of home delivery and pickup services at physical stores, which altogether are now accessible to 90% of all the U.S. households, up from 81% in 2018.

 

Customers Going Online Gradually

 

For its research, Brick Meets Click conducted an online survey with 2,485 adults who participated in their household’s grocery shopping.

 

Online purchase frequency for groceries remains about the same as last year, with active online grocery customers averaging two orders during the past month. Ship-to-home orders account for half of all online grocery orders, compared with 28% for pickup and 22% for home delivery.

 

Meanwhile, average order values — including ship-to-home, pickup and home delivery — have grown more than 6% to $70 in 2019, Brick Meets Click noted. And in a positive sign for retailers investing in on-demand services, the average order value swelled 13% to more than $100 across retail trade channels for only home delivery and pickup orders.

 

 “There’s still a fair amount of purchase trial occurring as consumers search for acceptable online shopping alternatives,” explained David Bishop, partner at Brick Meets Click. “For example, we found that approximately one-third of the active households’ most recent online order was the first time they used the service.”

 

A bigger user base appears in the offing, though. Brick Meet Click’s analysis found that online providers are improving the shopping experience, with the likelihood to use a specific service again jumping from 69% in 2018 to 81% this year. The study noted that improving customers’ ability to find the products they want to buy is key, as the percentage of shoppers who were able to do so rose to 90% in 2019, a 12-percentage-point gain versus last year.

 

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https://www.supermarketnews.com/online-retail/what-s-state-online-grocery

 

 

Walmart exec details improvements to online grocery experience

 

by Ashley Nickle, Produce Retailer 

Sep 18, 2019

 

LAS VEGAS — Walmart continues to refine its online grocery service to reduce friction and enhance personalization for pickup and delivery customers, and senior vice president of digital operations Tom Ward described some of the improvements Sept. 15 at industry conference Groceryshop.

 

For consumers seeking convenience, minutes matter, and Walmart has been working on ways to pickup and delivery faster and easier for shoppers.

 

‘Less busy’

 

One example is Walmart’s plan to show shoppers which grocery pickup windows will have the shortest wait times.

 

By calling out certain times as “less busy,” the retailer gives shoppers one more opportunity to make their experience more seamless.

 

“Because we’re doing thousands and thousands of these transactions every single week ...  we understand on a store-by-store basis, by hour, by day, and we can show that information to our customers,” Ward said in a presentation. “We use it as a business to improve the service because if you build this big basket, you want to pull into a spot, you want to get your groceries, and you want to get back out again, and so anything we can do using data to help make that better for customers, we’re going to show customers in the application.”

 

Walmart has already gotten good engagement on another feature that facilitates faster pickup.

 

When shoppers use the “check in” function to let the retailer know they are on their way, Walmart can track their vehicle and have their order ready exactly when they arrive, getting customers back on the road as soon as possible but also preserving food quality by keeping products in the proper temperature zones until the last possible moment.

 

Another way the company plans to shorten the pickup wait time is by having shoppers use the app to indicate which numbered space they are in and what color their car is.

 

‘Smart substitution’

 

As Walmart gathers more data from its e-commerce business and stores, it gains an understanding of which products shoppers accept in the event of out-of-stocks.

 

Harnessing that information lets Walmart do a better job delivering a satisfactory item to the shopper and eliminates a decision for the personal shopper picking the order.

 

“It’s dynamic by individual,” Ward said. “So if we know that Customer X, whenever this product’s out of stock, they always accept that product, and it might be not necessarily a bigger pack size, it might be two of the same one, it might be a slightly different brand for the same size, and it’s different, because I might prefer that and you might not, but once we know that about you, we’re going to only ever make that decision — and a picker won’t even realize, they’ll just keep picking and keep cranking through these volumes.”

 

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https://www.produceretailer.com/article/news-article/walmart-exec-details-improvements-online-grocery-experience