Dive Brief:

• U.S. consumers bought $6.8 billion worth of groceries online in June, according to the latest monthly survey from Brick Meets Click and Mercatus. That’s a 23% decline from the same period last year and down 3% compared to May 2021.
• In all, 63.5 million U.S. households bought groceries online during the month, a 12% drop from June 2020. Pickup and delivery sales accounted for $5.3 billion, while ship-to-home sales accounted for $1.5 billion, according to the survey conducted June 27 to 28.
• E-commerce sales are continuing to decline as expected, but notable trends stand out in the report, including pickup’s continued rise in popularity and the emergence of mass retail as a top competitor for grocers.

Dive Insight:

Although monthly e-commerce sales continue to fall both sequentially and year-over-year, top trends are starting to firm up among the millions of consumers still shopping for groceries online, including the channel’s most active users.

It’s no secret, for one, that pickup has been popular among these shoppers, but the latest figures from Brick Meets Click and Mercatus show a surprisingly steep rise continuing for the service. Among active users, the share of orders received through pickup grew nearly seven points year-over-year to 42%, while the share of delivery and ship-to-home orders dropped two and four points, respectively. For June, around one-third of active online users relied on pickup exclusively for online grocery orders, compared to 16% who only used delivery.

The overall usage rate for pickup in June was almost five percentage points higher than last year and more than 23 points higher than Aug. 2019. The service also had the highest usage across all geographic markets covered in the survey, including large metropolitan areas.

In emailed comments, David Bishop, partner with Brick Meets Click, said pickup’s growing popularity in areas like large metros underscores the need to invest in innovation, better service and other improvements.

“This shift will continue for a range of factors, which means that you not only need to offer pickup but that you must improve the service,” he wrote.

Bishop also pointed out that mass merchants like Walmart and Target have quickly become the closest online competitors for grocers, and that cross-shopping between the two formats is impacting consumers’ expectations for e-commerce service. 

Before the pandemic, 15% of survey takers reported ordering groceries from both mass merchants and grocers. That percentage has risen to more than 28% in June. Brick Meets Click’s survey included responses from 1,789 adults who participate in the household’s grocery shopping. 

Moreover, mass merchants have a repeat intent rate — indicating the likelihood that a monthly active user will order again from the same service within a month — that's almost nine points higher than grocers' rate.

“The expectations that a grocery customer has at their supermarket is becoming more influenced by that customer's experience shopping with a mass retailer,” Bishop wrote. “This is why the cross-shop number is so important for retailers to understand.”

Well-capitalized mass merchants like Walmart are making significant investments in warehouse automation, shipping and loyalty programs to funnel more e-commerce shoppers. Grocers, meanwhile, are rolling out new service elements in pickup, which is not only popular with shoppers but also more profitable for retailers. This includes automated kiosks and lockers that store orders, along with technology that reduces waiting times for customers when they arrive to gather their groceries.