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A reoccurring question coming out of the COVID-19 pandemic is how many of new behaviors will become our new normal.
Case in point: online grocery shopping. In its August 2019 survey, Brick Meets Click reported that total online grocery sales (delivery, pickup, shipped) were $2 billion. Brick Meets Click’s latest survey, released this week, showed that last month, total online grocery sales were $8.1 billion. And though the totals have fluctuated a bit, Brick Meets Click’s data says that online grocery sales have remained consistently over $8 billion since May (see chart above).
The pandemic pushed people into adopting online grocery shoppinng. As some counties enter another round of lockdowns because of surging COVID cases, there is still ample reason for many people to stick with online grocery shopping. But with multiple vaccines on the horizon and a potential light at the end of this very dark tunnel, the question of how many people will continue shopping online for groceries becomes more pressing.
The question of behavior going forward isn’t just academic. Retailers have poured a lot of resources into improving delivery and pickup capacity. Large brands have built entirely new direct-to-consumer channels, and third-party delivery services have raised hundreds of millions of dollars to provide online grocery shopping and delivery.
To find out a little bit more about what’s behind the numbers, I spoke with David Bishop, a Partner at Brick Meets Click, this week by phone. Bishop sees continues growth for online grocery shopping, albeit with a few caveats.
“Shopping online for groceries is getting stickier by the month,” Bishop told me. “The number of orders placed online continues to go up and the average order remains at elevated levels.” Bishop said this was primarily in delivery and curbside pickup, which represented $5.9 billion of $8.1 billion in November sales.
“The amount of items going into the cart continues to grow, and order frequency is once every 2.5 weeks,” Bishop said, which “Indicates a growing acceptance for shopping online for all things grocery.”
It’s an odd time all around for gathering grocery data. Not only are we nine months into a pandemic, we are smack dab in the middle of a holiday season that is vastly different because many of us aren’t traveling.
I asked Bishop what impact the holidays were having on the online grocery numbers and if they were skewing any of the results. “The holiday had minimal if nominal impact on the results for November,” he said. “Our average order spend doesn’t indicate any uptick in spending around the holiday period.”
So with a vaccine coming soon to market, what does Bishop see in the coming year for online grocery shopping?
“As the vaccination comes online, we will revert to the mean relative to the ongoing adoption and usage albeit from a considerable higher base,” he said. “Assuming we get through the pandemic and establish a new behavior, many of those shopping online will continue to shop online.”
This idea that growth will slow in 2021 is also reflected in projections from Mercatus and Incisiv, which found in September of this year that:
Growth of online grocery will slow in the immediate term, as shoppers return to stores due to reduced concern for COVID-19 risks. Retailers will be required to invest both in technology and re-alignment of operating models (store labor, forward deployment etc.) to improve customer experience and drive the next wave of growth, while ensuring profitability. Growth is expected to pick-up again in early 2022.
Plenty of questions remain when it comes to our post-pandemic world, but when it comes to the future of online grocery shopping, it seems like the answer is that it’s here to stay.
Check it Out, Cashierless Retail Expands in Asia
Another outstanding question from the pandemic is what retail will look like in the future. One eventual outcome could be widespread cashierless checkout, and two companies announced developments that could make grab-and-go grocery shopping more prevalent.
At least in Asia.
Zippin and tech giant Fujitsu announced this week that Fujitsu will be the exclusive distributor of Zippin’s cashierless technology in Japan. The two piloted a program at the Lawson convenience store chain earlier this year. In addition to re-selling Zippin’s tech, Fujitsu will be adding to it. For instance, the Lawson pilot added Fujitsu’s palm reading technology to Zippin’s stack to authenticate shoppers.
Yesterday, AiFi announced that it’s powering its largest store yet. The new 4,000 sq. ft. store in Shanghai features 2,000 product SKUs and is part of AiFi’s larger goal of opening 330 cashierless stores by the end of 2021.
Like so many other things, interest in cashierless checkout is being spurred by the pandemic. Cashierless checkout removes at least one human from the equation (the cashier), and its technologies promise to decrease the amount of time shoppers spend inside the store. Faster shopping means fewer people in the store, which is a good thing when combating and airborne virus.
The Zippin and AiFi announcements put a bow on the end of a busy year for the cashierless checkout sector, which has also seen a public implementation by Grabango at Giant Eagle’s Get+Go Market, a new countertop device for convenience stores from Caper, and Mastercard offering a cashierless checkout product with Accel Robotics.
More Headlines
Google Takes on Food Waste With Food Tech Innovations Built by X – Two prototypes developed as part of a project called Project Delta have graduated to the scaling and commercialization phase.
iUNU Raises $7M Series A for Computer Vision Approach to Indoor Growing – The company uses a combination of computer vision and AI to closely monitor the health of plants.
Solar Foods Gets $5.2M to Commercialize Protein Made From Air – These new funds will enable Solar Foods to open a new manufacturing facility and, more importantly, start to commercialize food products made from its Solein ingredient, an edible protein made from air and electricity.
Gotham Greens Raises $87M for Its High-Tech Greenhouse Network – Company says it plans to use the new funds to expand to increase the operational capacity of its farms, develop new products, and expand to more locations around the U.S.
ZeroCater’s New Cloud Cafe Adds Flexibility to Corporate Catering – New feature lets employers subsidize meals as much or as little as they want.
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