A sharp decrease in ship-to-home activity resulted in a January decline in online grocery sales, reports the Brick Meets Click/Mercatus Grocery Shopping Survey.
January online sales totaled $8.4 billion, down 1.2% versus a year earlier. Ship-to-home sales fell 15% to $1.3 billion, while pickup increased nearly 3% to $4.1 billion, and delivery held steady at around $3 billion.
The three online segments accounted for more than 12% of total grocery spending in January, which was slightly higher than a year ago and likely fueled by strong overall grocery spending, the survey reported.
The total e-grocery user base, meanwhile, declined 1.6 versus a year earlier, with the monthly average user (MAU) base for ship-to-home falling 10% and delivery dropping 2%. Pickup increased 1%.
Driving the usage declines was pull back by 30 to 44-year-olds, the largest user segment, which had a 5% activity drop, and the 60-and-over age group, which registered a 4% fall.
Overall order frequency, which peaked in May 2020, continues to drop, with declines in the number of MAUs making at least three orders during the month, and an increase in households completing only one order.
In addition, MAU order activity for mass merchandisers was 4% stronger than last year, while grocery order frequency increased less than 1%.
Online activity at mass merchandise outlets is on the upswing, with a MAU increase of more than 20% in January, while grocery MAU shrank by 6%, which was likely due to economic conditions and the relative price gap between grocery and mass, according to the survey.
Average order values, which exclude service costs, grew 6% and 8%, respectively, for delivery and pickup, while ship-to-home value fell more than 5%.
Mass merchandisers had an 11% increase in average order value, more than double that of grocery.
Yet, the likelihood that a customer will use the same service within the next 30 days fell about two percentage points to 60%. The decline in repeat intent was largely driven by the more frequent customers, “which is a troubling sign because they spend considerably more per order than the customer segments who buy less often,” the survey reported.
The grocery repeat intent rate of about 50% trailed mass by more than 14 percentage points in January, the largest gap since the measurement started, the survey reported
“Grocers would benefit from focusing on initiatives aimed at driving repeat engagement and loyalty to grow share of wallet with existing customers,” Sylvain Perrier, president and chief executive officer of Toronto-based Mercatus, a provider of grocery e-commerce software and sponsor of the survey, said in a statement. “Customers now expect retailers to engage them based on their individual preferences and purchase patterns.”
The Brick Meets Click/Mercatus Grocery Shopping Survey was conducted by Brick Meets Click, a Barrington, Ill.-based market research and insights firm, at the end of January with 1,735 adults who participated in their household’s grocery shopping.