IT’S IN THE BAG
The pandemic pushed consumers to buy groceries online. How many will still get them delivered?
Jon Roesser, the general manager of Weavers Way Co-op, usually works with banks and suppliers to keep the grocery running, puts together the $34 million budget or plans marketing promotions.
But as the demand for home deliveries exploded during the pandemic, Mr. 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 per week pre-pandemic 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 Mr. 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,” Mr. 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 returning to stores, preferring to pick their own produce and browse the aisles. But some of those online gains will stick, experts said, forcing grocers 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 to about 12%, said Cindy Liu, forecasting director for eMarketer.
Giant Co. is focused on these so-called omnichannel customers, who split their shopping between in-store 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.
Jeanne Patterson, 67, of Drexel Hill, started using the delivery platform Instacart during the early days of the pandemic. She’s now a fan of online ordering, saving hundreds of hours of shopping time, she said. Instacart also remembers which items Ms. Patterson previously purchased, a big help because she’s not good at writing grocery lists. She can use the app for multiple stores, too.
But others who tried digital grocery shopping were eager to return to stores once they felt safe. Rich Allen, 39, of Center City, grew frustrated as he received perishable items that quickly expired. He said one order included items that were “old, moldy or crushed.”
The economics of e-commerce aren’t great for groceries, which already operated on slim profit margins before the added cost of deliveries. Even Amazon.com, the world’s largest online retailer, is adding delivery fees for some Prime members who order from Whole Foods.
Weavers Way, collectively owned by more than 10,000 member households, essentially built its online ordering system overnight. It made a basic ordering form on its website, reassigned cashiers to delivery, and hired laid-off waiters and baristas.
The crush of online orders has since subsided, but Weavers Way officials believe it still needs to maintain an online presence. The co-op now has about six staffers handling digital grocery sales and has partnered with Mercato, an e-commerce platform with more sophisticated ordering capabilities and a 20-mile delivery radius.
“We feel that it’s a sort of a game that we have to be in,” Mr. Roesser said. “Otherwise we run the risk of giving all that business to Amazon.”