A significant percentage of online grocery shoppers in the U.S. are predominantly oriented towards grocery pickup services, while demand for grocery home delivery is falling out of priority for consumers, according to Mercatus’ annual eGrocery survey, conducted in collaboration with Incisiv.
The report, titled eGrocery Transformed: 2021 market projections and insight into online grocery’s elevated future, presented a snapshot of post-COVID buying intentions and looked at the online buying habits of different ethnic groups in the U.S.
According to the Mercatus survey, 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.
When asked the same question about home delivery, there was no increase in reported use by 2021. Forty-six percent of online grocery customers said using delivery services at least once in the last 12 months, the same level as in 2020.
And why did respondents prefer grocery pickup over delivery? They noted that the main reason was to avoid higher delivery fees and surcharges. While 57% of online customers say that expedited (same-day) delivery is important, only 15% of all shoppers are willing to pay a separate fee for it.
According to Mercatus’ analysis, wide-scale adoption of grocery pickup services is expected to curtail further online customers’ use of home delivery in the future. 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.”
The survey also asked about U.S. grocery customers’ preferred mode of online shopping. Mobile is the future of online grocery, as consumers are expected to increase their mobile channel usage in the next year by 14%. Grocery customers increasingly use 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 different age groups’ online grocery buying habits 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 recurring orders (2.8 per month), and the highest average monthly spend ($271). This trend was followed, in descending order, by Hispanic/Latinx, Asian and Caucasian households.
Over 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, said Mercatus.
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% of total U.S. grocery sales next year.
In five years, 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 $1,285 trillion. These numbers represent a marginal reduction over 2020’s estimate as U.S. grocery customers adjust to returning to brick-and-mortar grocery stores.