Dive Brief:

• Online grocery sales had another record-breaking month in May, increasing 24% over April to reach $6.6 billion, according to new research from Brick Meets Click and Mercatus.
• The research found that the total number of online grocery orders grew 18% month-over-month to 73.5 million in May. The companies said the increase took place as retailers expanded capacity, including reopening services and adding more time slots.
• Household penetration increased to 33% in May, from 31% in April, with about 43 million customers buying groceries online. This is also attributed to retailers’ increased capacity.

Dive Insight:

Now in the third month of the COVID-19 pandemic, retailers have been able to make positive changes to their operations to better accommodate e-commerce shopping. From Instacart’s hiring of nearly 500,000 to Walmart’s new “Express” service, grocers have added capacity as well as new services to meet demand and prepare for continued growth. 

May's growth suggests that customers have broken down some barriers to online shopping and are getting a little more savvy when it comes to buying their groceries online. They may have figured out how to reorder their favorite staples or better search for products in apps. And after facing issues over pickup or delivery times in previous weeks, they could be planning their online grocery hauls a little better. 

The findings show that loyalty and shopper satisfaction with online grocery are also improving across the pandemic. The survey found 56% of customers were “extremely” or “very likely” to shop at the same retailer within the next 30 days, up from 47% in March.

Pre-COVID, however, Brick Meets Click found that figure was closer to 80%, suggesting companies have more work to do to turn online grocery from a perceived necessity into an added value.  

Brick Meets Click and Mercatus also found the average monthly purchase frequency in May grew 10% from April, signifying that shoppers are beginning to make online shopping a more normal part of their lives. The average order value also grew in May to $90, which was an increase of nearly $5 from April. 

The companies said these findings could be a result of both higher consumer prices, which resulted from supply chain issues, and improvements in product availability as some of those issues were alleviated. Some retailers have removed limits on ordering certain products due to limited stock, which could also be boosting basket sizes.

Will online grocery continue to gain steam through the summer months? An increasing focus on value coupled with consumers isolating at home less promises to send more sales back to stores. According to Brick Meets Click, the number of households reporting an income drop of 25% or more since the pandemic hit has increased to 50 million, and more and more shoppers are reporting they're buying private label products.