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Industry Updates

As Online Grocery Sales Soar, Retailers Must Stay Focused on Customer Needs

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As much as we expected bricks-and-mortar retail sales to tumble in April (which they did), we expected online grocery sales to tower (which they did.)

According to a Brick Meets Click/Symphony RetailAI Online Grocery Survey conducted April 22-25, online grocery sales for home delivery and store pickup in April reached a record of $5.3 billion for a 30-day period, which represents a 37 percent increase over March sales.

Brick Meets Click, which offers digital grocery analysis, and Symphony RetailAI, which offers AI-enabled decision solutions for retailers and consumer packaged goods manufacturers, said the significant month-over-month sales growth for April was driven by a combination of factors: First, a 33 percent increase in the total number of online orders made per month; and, second, a 3 percent increase in order size from $82 to $85 as households continue to stock up on essential products.

The number of active online grocery shoppers who received a home delivery or store pickup order grew slightly more than 1 percent versus the previous month, bringing the total number of U.S. households shopping online for groceries to about 40 million for April. These online shoppers placed an average of 1.6 orders for either delivery or pickup during the past 30 days compared to 1.2 orders during March, according to the survey.

The April research revealed current insights into the motivators for shopping behavior related to home delivery or store pickup:

• Forty-seven percent of all households surveyed reported a high level of concern about getting the virus.

• Thirty-nine percent of all respondents reported a 25 percent or greater drop in their monthly income compared to the January/February 2020 time period.  This represents an estimated 49 million households, according to the study.

“These two factors are particularly important for retailers to understand,” says David Bishop, partner at Brick Meets Click. “The level of concern that customers have about health affects how they choose to shop — online or in-store — and the loss of income impacts where consumers shop and what they buy.”

The survey’s results also found that 26 percent of the households that had not bought groceries online in the last 30 days said they were extremely or very likely to try online shopping in the next three months.

“The ongoing shifts in spending mean that retailers will need to work carefully in applying historical sales data to forecast future sales, if they are going to be accurately aligned with shoppers,” said Kevin Sterneckert, chief marketing officer of Symphony RetailAI. “True demand, which includes lost sales and other characteristics beyond transactions at the register, is crucially important here. Today’s retail winners will be those that best understand their customers and can meet and exceed their expectations the fastest.”

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