The pandemic pushed consumers to buy groceries online — how many will continue to get them delivered?
PHILADELPHIA — Jon Roesser, the general manager of Weavers Way Coop, usually works with banks and suppliers to keep the grocery running, puts together the $34 million budget, or plans marketing promotions, like an upcoming sale on frozen shrimp.
But as the demand for home deliveries exploded during the pandemic, Roesser became a delivery driver, too. For a few weeks last year, he crisscrossed town in his 2000 Honda Accord, the trunk and backseat bulging with grocery bags. Store managers and the executive chef had to help deliver, too. “It was all hands on deck,” he said.
The co-op’s online orders skyrocketed from roughly 15 a week prepandemic to more than 800 by April 2020, excluding those managed by third parties such as Instacart. But the demand has fallen ever since. Weavers Way — with stores in Ambler, Chestnut Hill, and Mount Airy — received about 70 weekly orders last month for delivery and curbside pickup, according to sales data shared by Roesser.
“While demand has declined considerably compared to last spring, home delivery and curbside pickup does appear to be here to stay, now driven more by convenience than by necessity,” Roesser said.
The pandemic turned tens of millions of Americans into first-time online grocery buyers, fueling a 54% growth in web sales across the industry last year, according to the researcher eMarketer. Many of those customers are now returning to stores, preferring to pick their own produce and browse the aisles. But some of those online gains will stick, experts said, forcing groceries to adapt to changing shopping habits.
U.S. online grocery sales should surpass $100 billion this year, but the rate of growth has slowed, according to eMarketer. The research firm initially predicted sales would grow about 17% this year, but revised that down to about 12%, said Cindy Liu, forecasting director for eMarketer.
It’s unclear how many first-time web shoppers will stick with it, but some undoubtedly had a good experience, Liu said. Moving forward, those customers might not shop online most of the time, “but even if they convert one trip a month, that’s still a sizable growth,” she added.
Giant Co. is focused on these so-called omnichannel customers, who split their shopping between instore and online. These customers, who might request deliveries when they’re too busy for the store, ultimately spend more at Giant, said Matt Simon, the grocery’s vice president of brand experience. Groceries that can capture both a customer’s online and store sales will win in the future, he said.
“So much of a customer’s wallet is spread across different retailers today,” Simon said.
“There’s so many online pure plays and brick-andmortar stores. If a customer can see that one brand can solve what they need, then they’ll give more visibility to that brand.”
To this end, Giant has launched temperature-controlled lockers for customers to pick up orders. It has turned parts of four stores into micro-fulfillment centers, where workers prepare orders for delivery. And the chain now accepts food stamps (now known as SNAP benefits) for online orders. But the grocery chain still believes in brick and mortar. It recently opened a flagship store in Philadelphia with a beer garden and plans to open four more stores in the city.
“People are so busy nowadays, especially now that they’re out and about again, that we definitely believe ecommerce is here to stay,” Simon said. “But it’s not at the expense of the stores, as I believe some other people may have said prior.”