Demand for home delivery of online grocery orders has plateaued even as retailers continue to roll out same-day delivery services.
The number of online grocery customers who report using curbside pickup at least once in the last year increased to 61% on average in 2021, up 9% from the previous year’s survey, according to a study by Mercatus conducted in collaboration with Incisiv.
When asked the same question about home delivery, there was no increase in reported use for 2021. Forty-six percent of online grocery customers reported using delivery services at least once in the last 12 months — the same level as 2020.
The new report in in line with an earlier report by Mercatus, in which online grocery shoppers showed a growing preference for store pickup.
The main reason consumers said they prefer grocery pickup over delivery is to avoid higher delivery fees and surcharges. While 57% of online customers said that expedited (same-day) delivery is important, only 15% of all shoppers are willing to pay a separate fee for it.
The wide-scale adoption of grocery pickup services is expected to further curtail online customers’ use of home delivery in the future, advised Mercatus. Pre-pandemic the number of respondents who said they preferred using delivery was 27%. That number climbed to 41% during the height of pandemic-related restrictions. Post-pandemic that number is expected to drop to 24% as retailers continue to improve their ability to offer a better online customer fulfillment experience.
“Pickup works particularly well for both grocers and their customers in the North American market,” said Sylvain Perrier, president & CEO at Mercatus. “Pickup services offer grocers more control over the cost to serve online customers than third-party delivery. Online customers love the precision, flexibility and overall convenience that store pickup provides. And when done well, pickup services make for a better overall shopping experience that builds lasting connections with customers, which will lead to repeat business for grocers.”
Other highlights from the report, titled eGrocery Transformed: 2021 market projections and insight into online grocery's elevated future, are below.
• Mobile is clearly the future of online grocery, as consumers are expected to increase their mobile channel usage in the next year by 14%. Grocery customers are increasingly using their preferred retailer’s mobile application for in-store assistance like product location, proximity promotions and self-checkout.
• With regards to the online grocery buying habits of different age groups and racial/ethnic communities, across all respondents, non-white households skew younger and report larger average online order values.
• Black or African American households reported the highest online usage at 54% in 2021, the most frequent orders (2.8 per month), and with the highest average monthly spend ($271). This was followed, in descending order, by Hispanic/Latinx, Asian and Caucasian households.
According to Incisiv, the online grocery channel (pickup, delivery and ship-to-home) is expected to continue to grow to reach 11.1% of total U.S. grocery sales in 2021. In five years’ time, online grocery is projected to account for 20.5% of total U.S. grocery sales – or an estimated $263 billion out of total annual sales of USD $1,285 trillion. This represents a marginal reduction over 2020’s estimate as U.S. grocery customers adjust to returning to brick-and-mortar grocery stores.
More than 40,000 respondents across 20 states completed the survey, generating more than 40 million data points. The survey, fielded in July 2021, is the most comprehensive measure of the dramatic shifts that have permanently changed digital grocery.