A bit of back-to-normal shopping has impacted year-over-year grocery e-commerce sales for the month of June, and showed a slight dip month-to-month, according to the rolling Brick Meets Click/Mercatus Grocery Shopping Survey.
The latest survey was fielded June 27-28 and found that U.S. e-commerce grocery sales reached $6.8 billion in June, down 23% compared with a year ago, and down 3% compared with May, as ship-to-home sales totaled $1.5 billion and pickup/delivery reached $5.3 billion, according to the survey.
The overall sales decline, much like in May, was driven by decreases in the number of monthly active users, order frequency, and spending per order, yet the degree of online grocery cross-shopping between grocery and mass retail services remained near all-time highs, Brick Meets Click said.
“We all know that the pandemic disrupted the way many U.S. households bought groceries, but it’s now becoming more evident how some retailers have more effectively changed the way they sell groceries,” said David Bishop, partner at Brick Meets Click. “When you look beyond online grocery’s monthly performance, the big picture shows which retail segments are winning market share by providing a more seamless shopping experience for their customers.”
The ongoing independent research initiative, created and conducted by Brick Meets Click and sponsored by Mercatus, found that 63.5 million U.S. households bought groceries online in June, a 12% decline from June 2020. Monthly active users declined across all age groups and monthly active users placed an average of 2.7 online orders, down 6% from 2.89 orders a year ago.
The research also looked at the variation in how households shopped online for groceries by geo-coding responses via zip code into one of four market types based on population size. During June 2021, pickup regained the top share in large metro markets and once again became the dominant method across all four market types, growing monthly order share in all market types versus last year. In comparison, ship-to-home’s order share shrank across all market types, and delivery’s order share grew only slightly in the least populated markets on a year-over-year basis.
The June 2021 results also revealed that 33% of monthly active users received online grocery orders only via pickup; another 16% received online grocery orders only via delivery.
“The cumulative effect of consistently executing a sound strategy that delivers against the brand’s promise has helped mass retailers outperform grocery on key metrics, including monthly active users, order frequency and AOV in June 2021,” Bishop said. “It’s vital for grocers to compete against mass, but it’s also essential that grocery retailers don’t try to operate like mass since that is an unsustainable strategy.”
The comparisons between grocery and mass remained extremely relevant as the share of online customers who used both a grocery service and a mass retail service to buy groceries during the month exceeded 28% for the second straight month. In fact, the ongoing research illustrates how a mass rival could now be a grocery retailer’s primary competitor when it comes to online grocery, as the cross-over shopping rate was only 15% pre-COVID (in Aug. 2019).
“Given June’s results, it’s hard to deny U.S. consumers’ clear preference for pickup services in all market types,” said Sylvain Perrier, president and CEO, Mercatus. “Regional grocers looking to solidify their sales gains also confront a more competitive environment. The mass merchants and third-party delivery services are all looking to protect their share of online wallet. One clear action grocers should take is to double-down on modeling your repeat online customers shopping preferences, and develop a re-engagement strategy that plays to your retail brand’s unique strengths. Second, invest both in the technology and re-alignment of your operating models so you can improve the overall customer pickup experience at a lower cost to your business.”