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E-Commerce Supermarket Scorecard: Online Grocery Growth Accelerating

Deep Vision Data

Online grocery purchases average 3.4 percent of total store sales for supermarkets offering the service, but the number jumps to 5.2 percent of total sales for those retailers who have had the service for at least 4 years, according to the new Brick Meets Click Grocery Ecommerce Supermarket Scorecard Report. These results show that e-commerce is becoming an important contributor to supermarket sales.

This growth in supermarket e-commerce comes as the online grocery battle between Amazon and Walmart is intensifying.

“The good news is that supermarket e-commerce growth was happening even before Amazon announced their purchase of Whole Foods,” said David Bishop, partner at Brick Meets Click and lead author of the report. “And the rapid deployment of a number of different Walmart initiatives reveals that the company considers online grocery an important gateway to their e-commerce growth. The increased competition in grocery is not just putting pressure on supermarkets to get into ecommerce; it’s requiring that they be good at it, too.”

The updated Scorecard Report is based on the online transactions that took place during the 4-week period ending March 31, 2017, at nearly 200 stores operated under 26 different retail banners. The scorecard provides benchmarks that give organizations visibility into ‘how they compare’ and also insights to help both retailers and brands build their online sales.

“While some food retailers have moved cautiously into e-commerce, adoption is now accelerating, driven partly by the increased share of households who are regularly buying groceries online. This research found that 24 percent of shoppers bought groceries online in the last 30 days, up from 22 percent two years ago,” said Steve Bishop, manager partner and co-founder of Brick Meets Click.

Additionally, the average number of online transactions per store is up almost 20 percent from last year, and total online sales are growing year over year at more than 25 percent.

Customer confidence in online grocery also is growing. The average size of supermarket online transactions—$148 according to the recent Brick Meets Click research—shows that customers are comfortable buying a broad range of grocery products online; the average value of customer orders increased over the previous year by more than 5 percent.

This growth is based on households buying a wide range of food items online from supermarkets. While it was expected that the share of online transactions would be high in edible grocery, dairy and frozen, it was more surprising that:

  • About 85 percent of online transactions included produce items.
  • Meat/seafood and deli were found in more than 66 percent of the transactions.
  • Bakery was found in almost 50 percent of the transactions.

Turning to fulfillment methods, 66 percent of the stores offered only pickup, 2 percent offered only delivery, and 32 percent offered both options. When stores offered both options, delivery was most popular; 74 percent of orders were delivered versus 26 percent picked up.

The report also identifies opportunities for improvement and growth. One of those areas involves recovering lost sales—sales that were lost because an item that was ordered was not in stock and no substitute was available. The average banner experienced 3.3 percent loss in online sales. Edible grocery had lost sales of 3.6 percent, but because of the size of this category it generated 38 percent of all lost sales. General merchandise experienced the highest rate of lost sales—8.5 percent—but generated just 2 percent of the total lost sales, as the department under-indexes for grocers online versus in-store.

Grocery Ecommerce Supermarket Scorecard reports are available. Custom category-level reports can be completed by special request by contacting David Bishop at [email protected]

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