Over this past year, a lot of things have changed. We’ve been staying in more, had way too much alone time, and we’ve seen a shift in the way we get our groceries! Today, we’re taking a look at the companies behind online grocery delivery and what it means for our future. Here are 10 Reasons Why Online Grocery Delivery Is On The Rise.
10. The Begining 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. Ultimately, it’s up to the companies to get themselves in a place where they’re ready to meet these new demands.
9. 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, Instacard 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.
8. 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 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.
7. 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.
6. 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.
5. 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! Whether you like HelloFresh, Goodfood, or any other meal kit service, you can rest assured that they’re not going anywhere.
4. 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 on groceries, up 30% from March 2019. Things settled down to $455 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. Plus, they usually want the things they buy to last longer as a way of avoiding going out again. While some people have used the pandemic to try out more fresh veggies, a lot of people are going for shelf-stable bulk food. 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.
3. 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 peak 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.
2. 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 in 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.
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 percent, reaching a humongous $89 billion in sales! For reference, that’s an increase of over $30 billion from the year prior. And things are only looking up from here. By 2023, online grocery sales will reach $130 billion 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!