Research firm Brick Meets Click projects online grocery sales will grow 15% in 2019, with providers that offer delivery and pickup expected to grow online sales 25-30%.
More consumers now have the option to use these services. Brick Meets Click reports that 81% of households had access in 2018, and the number is expected to reach 90% in 2019.
“Increasing the number of households who have access to online grocery shopping services with home delivery or pickup could add almost two points to the percentage of U.S. households who buy groceries online, pushing the 2019 monthly rate past 25% at the national level,” David Bishop, partner at Brick Meets Click, said in a news release. “At the same time, this will offer a meaningful boost to particular providers in those market areas, as we expect that most of the sales generated by new households going online for groceries will flow toward the brick-and-mortar delivery or pickup providers.”
The firm noted that other retailers outperform Amazon when it comes to fulfilling grocery needs.
“Compared to households that use Amazon, households that use an online grocery delivery or pickup service: a) place more frequent orders (1.9 vs. 1.6 orders per month), and b) spend considerably more money per order (an average of $105 vs. $46),” Brick Meets Click wrote in the release. “This equates to households spending almost three times more with a delivery or pickup service vs. Amazon on a monthly basis ($200 vs. $74 respectively).”
Bishop explained why shoppers seem to favor retailers other than Amazon for groceries.
“Whether an online grocery shopper uses delivery or pickup, both services offer shoppers greater convenience, more control and better ability to accomplish more of the household’s grocery shopping than providers who ship orders to the home in two or even three days,” Bishop said in the release. “Where else can a grocery shopper receive an order in one hour or less, select a specific time slot for receiving the order, and get almost all the same things as when shopping in the store?
“It ultimately comes down to creating an experience that customers perceive as a more valuable alternative to shopping — one that better fits the way they want to select and get their groceries,” Bishop said. “While the implications are straightforward, excelling at execution is more challenging. Providers have to understand whether winning more sales depends on simply improving execution, requires refining elements of the strategy, or some combination of both.”