Have you recently changed the way you do your grocery shopping? Well you're not the only
one. So let’s find out 10 Reasons Why Online Grocery Delivery Is On The Rise.
The Beginning Of A New Era
Considering the potential consequences of leaving the house unprotected, is it really
that surprising that a lot of people are avoiding crowds as much as possible? Before the pandemic,
online grocery delivery was a niche industry. The general population did their groceries
as part of their weekly chores and didn’t think twice about it. Today, things are different.
Choosing to get groceries delivered brought on a different set of responsibilities - sitting
down and planning what you’re going to eat and calculating the delivery fees in your
budget. After the pandemic started, people started to grow more cautious of grocery stores.
Closed spaces became a source of stress, and that's where the online grocery delivery companies
stepped up. They knew exactly what they had to do to keep people safe and sane while making
a lot of money in the process. Before, the online grocery niche was small but growing
steadily, and the pandemic accelerated that growth exponentially, with e-commerce going
from 2% of total food and drink sales in 2019 to a whopping 53% in 2020! In other words,
the longer this crisis goes on, the more people will be pushed to try these online services.
The Rise Of Instacart
No one could have predicted what 2020 would turn out to be like. Well, no one except for
Nilam Ganenthiran, the president of Instacart. Maybe he was just hyping up his company, but
when he proclaimed in 2019 that 2020 would be the year of online grocery shopping, he
couldn’t have been more right. Only eight weeks after he had prophesied it, the U.S.
federal government declared a national emergency over the pandemic, and suddenly, tens of millions
of Americans were told that staying home was way better than physically going to the grocery
store. Overnight, something that people considered a luxury, and might’ve considered only if
their schedules were too full, now became a necessity. And who was there to meet that
need? That’s right, Instacart. It’s crazy to hear, but according to Ganenthiran, the
company saw a 500% jump in order volume. On top of that, basket sizes were increasing
by 35%. Suddenly, Instacart was the only place people could get their groceries and goods
delivered. When toilet paper was disappearing from store shelves, Instacart was there for
its customers. By the end of 2020, the Instacart team had perfected their craft and have been
moving onto bigger projects. At the moment, Instacart is determined not to let this opportunity
go to waste. They want to build a better future for the online grocery industry. Most importantly,
they want to continue being there for their customers.
Robot Delivery
Even though it’s been mostly horrible staying inside all the time, the pandemic has still
allowed for new innovations to thrive. For instance, in June, Sobeys, delivering under
the name Voilà by Sobeys, opened a $100-million dollar warehouse in Vaughan, a town just northwest
of Toronto. Inside the warehouse, instead of hiring human workers, the company has invested
in hundreds upon hundreds of cube-shaped robots. It looks like something straight out of a futuristic
movie. The robots compile online orders from a stock of over sixteen hundred products by
moving along a three-story storage system known as "the hive," delivering items to humans
below who package them. The robots are made by Ocado, a company based in the United Kingdom,
and they can round up a 50-item order in about five minutes! This innovation has been described
as game-changing, mostly because robots don’t make nearly as many mistakes as their human
counterparts. Plus, by using the Voila website or the Voila mobile app, customers get a whole
different experience. The robots have a 99 percent order accuracy, and the requests are
filled at a dedicated, temperature-controlled warehouse full of frozen and chilled goods,
meaning that your order will be fresh and correct. And again, the less human contact,
the better. They've been doing such a good job that the center has extended its service
area, and orders for the company are only looking up! No matter how you feel about automated
workers, you’ve got to admit that these robots are pretty cute.
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moving on….
Costco Finally Offering Curb-side Pickup?
In the midst of the pandemic, many companies are flourishing, but there are only a few
who have the ability to adapt to new situations, and Costco is one of them. Unlike some of
the other chains, though, Costco is still primarily focusing on its in-store sales.
Even in the middle of the pandemic, Costco held out on creating a way to order your groceries
online. This is because, unlike other stores, it doesn’t need the click-and-collect system
to attract and retain shoppers. If you have a Costco membership, or if you’ve ever
gone to Costco, you know that the prices and the quality of the items are definitely huge
pros of shopping there. But, because it listens to its customer’s demands, the company has
reluctantly started to change their tune. In January, they announced that they’d found
a way to cater to those who didn't want to leave the safety of their own homes. The company
recently started testing out a curb-side pickup. The test was announced in January and focused
on three stores in Albuquerque, New Mexico. There are no expansion plans yet, but a representative
said it's because the company is evaluating how to most efficiently operate the service
and whether or not it can be put into practice full-scale. In other words, Costco is working
on creating a more accessible way to shop, but for now, it’s still testing the waters.
Czech This Out
We’ve been talking a lot about companies in North America, but what about across the
globe? Food delivery services have been on the rise everywhere in the world, and it’s
been one of the most-used services in 2020. So, how are other, non-North American companies
doing? Well, a Czech startup company by the name of Rohlik has also been taking advantage
of the new online grocery market. The company has nearly seventeen thousand items in its
online store, and it’s doing remarkably well for itself during these trying times.
In 2020, it saw its revenues rise 101%. The company has made over 300 million euros and
has procured around 750,000 customers. The thing that helps Rohlik stand out against
its competitors is that this company knows how to tap into the specific shopping habits
of the average European urban consumer, who enjoys shopping at smaller businesses as well
as large supermarkets. The company also offers a two-hour delivery turnaround and an amazing
assortment of products! Not only can you find all the things you’d find in a supermarket,
but you can also find products from local butchers, fishmongers, bakers, farmers, and
more! These are things that you can’t buy in mass retail, and it seems as though their
customers can’t get enough of them. If you’re quarantined in Europe, this is definitely
something you want to Czech out.
Meal Kits For The Win
We’ve been talking about online grocery shopping, but that’s not the only business
that’s been booming since we’ve all been locked behind closed doors. Meal kits like
HelloFresh have been absolutely thriving in this environment, and it doesn’t seem to
be slowing down anytime soon. During the summer of 2020, the Berlin-based global retailer
reported sales of 972.1 million euros in its second-quarter alone. That’s a 122% increase
from a year ago! The company fully understands why it’s getting so popular, too, stating
that while people are at home, they have more incentive to cook and try new recipes. And
when you have pre-portioned ingredients delivered straight to your door, that’s all the better.
Not only did its sales increase by a huge amount, but its user-base grew too. The user
base is up by 74% compared to last year, and once people try it, they’re likely to continue
using the service. Another meal kit service that’s been growing is the Montreal-based
Goodfood Market Corp., which is the market leader in Canada. As of April 2020, the company
reported its first-ever profit, posting a net income of a whopping $2.8 million dollars!
Whether you like HelloFresh, Goodfood, or any other meal kit service, you can rest assured
that they’re not going anywhere.
What People Are Buying
Overall, this year has been full of changes. People have had to adapt to situations they
never thought they’d have to adapt to. The way that they’re shopping is different,
and so are the things they’re buying. With everything closing suddenly and with many
staying inside as much as possible, a lot of people have turned to cooking to occupy
their less-than-busy schedules. Obviously, this means that people are buying more ingredients
to sustain their new hobby and are stocking up because of the uncertainty of the pandemic.
In March 2020, the average American household spent $525 dollars on groceries, up 30% from
March 2019. Things settled down to $455 dollars per household in July 2020, but that’s still
10% more than spending in July 2019. In other words, people are grocery shopping less often,
but when they do, they don't do things halfway. Customers want to feel prepared just in case
there’s another toilet paper shortage, and at this rate, we don’t think that’s going
to change soon.
How People Are Shopping
While a good amount of people probably won’t continue using online grocery delivery services
when this is all over, it doesn’t mean that the way they shop is ever going to go back
to normal. Instead of casually strolling through the aisles, taking their sweet time, waiting
for something to strike their fancy, most shoppers now have one thing on their minds;
get in and get out as fast as they can, you know, like a spy in the night. Over the last
six months, consumers have decreased the amount of time they spend in stores. Most shoppers
have trusted items they purchase regularly and are less likely to browse the store to
look for a new ingredient or menu inspiration. To match the changing trends, many grocery
stores are focused mainly on restocking their best-selling shelf-stable items instead of
branching out with new brands and products. Stores are also changing their internal organization,
helping customers get what they need as quickly as possible. Lastly, people are choosing self-service
options more than ever. So, even after the pandemic is over, people are going to have
their grocery list game down.
Metro’s Adaptation
Plenty of grocery chains are expanding the way they do business. Metro, a Canadian chain, recently
reported that its online food sales have nearly tripled compared to the previous year, once
again confirming that people are getting more and more comfortable with the idea of getting
groceries from the comfort of their couch. Not only did the company increase the order
capacity out of its hub stores, but it also recently opened its first center for online
orders near Montreal last summer! The Canadian food and drug retailer said the online grocery
service kicked off in August of 2020 at the Metro Plus Plouffe supermarket in Sherbrooke,
Quebec. Serving that community and surrounding areas, the new hub store will give more than
73,000 households, and over 160,000 consumers access to online grocery shopping and pickup
service. For those who need a safe way to get their groceries during the chaos of the
pandemic, this is great news. And, for those who don’t live in Quebec, don’t worry,
because plenty more are going to be opening up soon. The Ontario and Quebec-based company
had originally planned to have forty locations with the “click and collect” service by
the end of 2021, but now, it will instead aim for more than a hundred. The reason behind
this is easy enough to guess. In an interview, the executive vice-president of e-commerce
for Metro - said that the company is simply adapting to demands. As it becomes more evident
that people will continue shopping from home, Metro now needs to find a way to accommodate
those demands.
Predictions
The further the world gets into this pandemic; the further grocery e-commerce continues to
be developed. As more and more consumers get in the habit of buying their groceries online,
online grocery delivery sales are growing by the minute. By 2020, online grocery sales
in the US grew by nearly 53%, reaching a humongous $89 billion dollars in sales! For reference,
that's an increase of over $30 billion dollars from the year prior. And things are only looking
up from here. By 2023, online grocery sales will reach $130 billion dollars and will account
for nearly 10% of total grocery sales. That’s a lot of online grocery shopping! It’s no
surprise that millions of US consumers have made online grocery shopping their primary
way of getting food. But, did you know that there was an estimated 131 million new digital
grocery buyers in the US this year? That's an almost 42 percent increase from 2019! And
once people get into habits like online shopping, it’s fair to assume most of them won't go
back to the regular grocery stores any time soon. That means that the number of digital
grocery buyers will continue to grow, reaching an estimated 147 million buyers by 2023! Considering
that 68% of new online grocery shoppers said that they would continue to shop online in
the future, these numbers aren’t shocking. Guess we can look forward to less crowded
grocery stores when the pandemic is over!
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