The 2020 Takeaway You Can’t Ignore: Invest in eGrocery
What remains to be seen is what percentage of those customers trying new services will adopt it as the “new norm”, post-pandemic.
Grocery Shopping Habits Changing Overnight
The real story here is of adaptability – and triumph. In the wake of the pandemic, grocers needed to adapt quickly. From in-store safety measures for customers and associates, to panic-buying product shortages and an explosive growth of e-commerce, grocers overcame a colossal wave of change in just a few months. But, the impact to consumers may have been even more distressing. Not only did they worry about potential job loss, but many became at-home day care workers and homeschool teachers while shifting to working from home at the same time. Then, with shelter-in-place and social distancing measures, they had to find new ways to shop for their household’s groceries.
The Grocery Data Tells a Story
So, how did grocery shoppers adjust? In March, research by Brick Meets Click found 31% of U.S. households (about 39.5 million consumers) surveyed used online grocery delivery or pickup that month. In April, the number rose by 1% to 40 million consumers. The average number of orders per household also increased by 33%, from 1.2 orders to 1.6 orders. But the most shocking eGrocery statistic is the 37% increase in online grocery sales to $5.3 billion for home delivery and store pickup.
The most shocking eGrocery statistic, in a report by Brick Meets Click, is the 37% increase in online grocery sales to $5.3 billion for home delivery and store pickup.
There’s two major motivating factors of the shift in grocery shopping behavior to home delivery or store pickup:
One positive statistic that the survey highlighted was that 26% of the households that had not used an online grocery service in the last 30 days said they were extremely or very likely to try it in the next three months. The question: how many of those consumers will have a positive pickup or delivery experience? And how many will continue to use the service moving forward?
It was once predicted that online grocery sales would account for 10-15% of overall grocery revenue within the next six years. This statistic has now spiked to 25% of overall sales within the next few years. Business Insider Intelligence, a retail strategy and consulting firm, also projected that by the end of the year, roughly 50% of U.S. consumers will have used an online grocery service. Because of this swift shift, one major challenge that grocers are facing is optimizing their stores for efficient order picking, packing, sorting and storage – all in preparation for pickup. Store-based online fulfillment and manual picking limits the capacity of online grocery ordering. Not to mention, the difficulty of determining what’s in stock when a customer places an order online. Statements by major grocery players are accelerating investment in contactless workflow to help expand order fulfillment programs. Ahold Delhaize has accelerated their plans to open home delivery warehouses, including three warehouses and two fully automated frozen facilities. Albertsons is also accelerating their investment in technology and labor to commensurate the growth of their online programs. They’re currently piloting micro-fulfillment in two stores and automating other processes like order fulfillment and inventory management. Walmart isn’t just expanding the efficiency and speed of their online fulfillment. They’re also creating retail theater for shoppers. Because of placing micro-fulfillment centers in the middle of their stores, shoppers can watch from a mezzanine with a cup of coffee as robots pick their orders for them. (Full disclosure: Bell and Howell is the firm who sold Walmart the Pickup Towers, installed them, and continues to service them today.)
Take Steps to Update Grocery Stores with Automation
Although major grocery chains are investing in big automated fulfillment companies like Ocado, Alert Innovation, and Dematic, grocers don’t have to make the same big investment all at once. Grocers can start with implementing automated pickup solutions now. Then, those solutions can grow and integrate directly with any automated fulfillment company in the future. The reality is that no single solution fits every grocer’s need. But, Bell and Howell offers a full portfolio of solutions to fit every automated pickup scenario. From temperature-controlled lockers that remotely shift between heated and frozen ranges, to multi-portal curbside pickup solutions, grocers have options to provide their customers with a unique online order pickup experience. eGrocery is accelerating, and the grocers who provide the most consistent and efficient experience will come out on top. The technology is here. Are you investing in today and tomorrow?