Mercatus, a provider in digital commerce solutions for grocery retail, has released findings from its annual survey of U.S. consumers, conducted in collaboration with Incisiv. The report, titled eGrocery Transformed: 2021 market projections and insight into online grocery’s elevated future, confirms that U.S. online grocery customers are predominantly oriented toward grocery pickup services, with 75 percent of survey respondents preferring store pickup.
The number of online grocery customers who report using curbside pickup at least once in the last year increased to 61 percent on average in 2021, up 9 percent from the previous year’s survey. 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.
When asked why they preferred grocery pickup over delivery, respondents identified avoiding higher delivery fees and surcharges as the main reason. While 57 percent of online customers say that expedited (same-day) delivery is important, only 15 percent 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. Pre-pandemic, the number of respondents who said they preferred using delivery was 27 percent. That number climbed to 41 percent during the height of pandemic-related restrictions. Post-pandemic that number is expected to drop to 24 percent 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 and 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.”
The survey also asked about U.S. grocery customers’ preferred mode of online shopping. Mobile is clearly the future of online grocery, as consumers are expected to increase their mobile channel usage in the next year by 14 percent.
Grocery customers are increasingly using their preferred retailer’s mobile application for in-store assistance like product location, proximity promotions and self-checkout.
New for 2021, the survey inquired about post-COVID buying intentions and looked at 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 percent 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.
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.
According to Incisiv, the increased adoption of online grocery evident in the survey results means the online grocery channel (pickup, delivery and ship-to-home) is expected to continue to grow to reach 11.1 percent of total U.S. grocery sales next year. In five years’ time, online grocery is projected to account for 20.5 percent of total U.S. grocery sales – or an estimated $263 billion out of total annual sales of $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.
Mercatus enables clients to create authentic digital shopping experiences with solutions to drive shopper engagement, grow share of wallet and profitability, and adapt to changes in consumer behavior. The Mercatus Digital Commerce platform is used by leading North American retailers, including Weis Markets, Save Mart brands, Brookshire’s Grocery Co. brands, WinCo Foods, Smart & Final, Stater Bros. Markets and others. Mercatus is headquartered in Toronto, Canada.
