Why online grocery sales continue to grow

Online grocery sales have climbed more than 15% on a year-over-year basis.

Online grocery sales continue to climb higher — they have soared more than 15% on a year-over-year basis and now account for 6.3% of total grocery-related spending by U.S. households, according to Brick Meets Click’s recently released analysis on the state of the U.S. e-grocery market.

According to Barrington, Ill.-based Brick Meets Click, a firm that provides strategic guidance about how the U.S. grocery business is evolving, online providers are improving the grocery shopping experience for consumers, which led to 81% of consumers saying they would use a specific service again, up from 69% in 2018. Improving the ability to find products that a customer wants to purchase is a key factor, and the percentage of customers who found everything they wanted to buy rose to 90% in 2019, a 12 percentage points gain versus last year, according to Brick Meets Click.

“There’s still a fair amount of purchase trial — occurring as consumers search for acceptable online shopping alternatives,” said David Bishop, a 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.”

Several factors are driving the growth of the U.S. online grocery market, according to Brick Meets Click:

• Household penetration, based on past month shopping activity, has risen more than five percentage points over the last year to nearly 25% of all U.S. households. This gain is largely the result of aggressive expansion of home delivery and pickup services available at brick-and-mortar stores, which collectively are now accessible to 90% of all the households in the U.S. — up from 81% in 2018.

• Average order values, encompassing ship to home, home delivery and pickup orders, have climbed more than 6% to $70 in 2019. When only analyzing home delivery and pickup orders across various retail trade channels, the average order value grew 13% to just over $100.

• Online purchase frequency for groceries remains relatively unchanged versus last year, averaging two orders during the past month for active online grocery customers. Ship-to-home orders accounts for 50% of all online grocery orders while pickup captured 28% and home delivery 22% of the orders respectively.