The novel coronavirus pandemic drastically altered Americans’ buying habits. As individuals across the globe adhered to lockdown mandates, online grocery sales soared. Grocery retailers, in particular, embodied dexterity and innovation during a time of uncertainty. With a drop in in-person sales, the grocery industry welcomed online and mobile purchasing options like buy-online-pick-up-in-store (BOPIS). Although many grocery stores were investing in digital shopping options prior to the pandemic, the responsiveness of the grocery industry provided innovative and safe options for shoppers and employees.
Convenience and Safety
As many Americans remain wary of returning to in-person retail, online grocery websites allow consumers to conveniently and safely buy what they need. With more and more individuals cooking at home, online grocery sales grew 54% in the past year alone. Also, during the pandemic, BOPIS and other methods of contactless shopping reached a new high. As of June 2020, over 60% of millennials and Gen Z in-store shoppers in the United States had ordered groceries online in the prior month. Providing shoppers with a convenient and safe alternative during this unprecedented time will not only boost profitability but increase brand value for the grocery.
Opportunities for Increased Online Grocery Sales
While Americans shifted their buying habits in the past year, retailers placed an increased focus on the online market. As of 2020, traditional in-store transactions accounted for a 73.4% share of sales of retailers worldwide. Offline and online, the only retail categories that saw growth in 2020 were grocery and household supplies. With their minds focused on the global pandemic, Americans spent most in areas that benefited their health and wellness or contributed to their experiences at home.
Capitalizing on Online Grocery Retail
In 2018, online grocery shopping sales in the United States were projected to reach $41 billion by 2021. However, online grocery sales in the U.S. reached over $95 billion in 2020, exponentially surpassing its projected value. Given the success of digital grocery shopping options in 2020 and through 2021 so far, it is reasonable to assume that shopping options like BOPIS and contactless delivery or pickup will remain an important part of the grocery experience. Although implementing new shopping platforms can be challenging for retailers, and may require significant investments, retailers that can provide digital experiences will continue to see the benefit of these investments for years to come.
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Coauthor and contributions by Rachel Ruth