July 2021: Total U.S. Online Grocery Sales hit $6.7 billion, down 2% month over month

Topline

The U.S. online grocery market generated $6.7 billion in sales during July, as ship-to-home sales declined to $1.4 billion while the combined pickup/delivery segment remained steady at $5.3 billion for the third straight month, according to the Brick Meets Click/Mercatus Grocery Shopping Survey * fielded July 28-29, 2021.

“The July results clearly reinforce that online shopping has maintained a significant portion of last year’s gains, especially for pickup and delivery, but the surge in new COVID-19 cases during July appears to have impacted shoppers’ buying behaviors differently than at the onset of this crisis in 2020.,” explained David Bishop partner and research lead, Brick Meets Click.

Key Findings & Insights: July YOY

According to the July 2021 Brick Meets Click/Mercatus Grocery Shopping Survey, July’s overall sales decline was caused by a decrease in spending per order and a slight drop in monthly order frequency; these factors were partially offset by an increase in the number of monthly active users (MAU).

AOV decline

The weighted average spending per order across all three receiving methods shrank more than 5% in July 2021 versus a month ago due to two factors.

• The ship-to-home average order value (AOV) was nearly 19% lower versus June 2021, while the pickup/delivery AOV essentially held steady.
• Ship-to-home captured a larger share of orders on a month-over-month basis, which contributed further downward pressure on the top-line AOV because ship-to-home’s spending per order is typically about half that of pickup and delivery orders.

Lower order frequency

Order frequency dipped slightly, just under 1%, to 2.68 orders per monthly active user during July 2021 as compared to 2.70 during the prior month.

Ship-to-home grew its share of monthly online grocery orders by nearly three percentage points in July to 34%. Although this resulted in a share loss for the pickup and delivery segment overall, delivery performed well, while pickup lost five share points on a month-over-month basis.

Notably, more than four in 10 MAUs have placed three or more orders per month since Jan. 2021, stabilizing after COVID peak levels in 2020.

Slightly larger (and shifting) base of engaged households

The number of U.S. households that bought groceries online in July, using any of the three receiving methods, jumped nearly 5% to 66.5 million households compared to June 2021.

This gain reflects increases across all age groups with the youngest (18-29 years old) climbing the fastest by more than 7%.

Somewhat surprisingly, the share of the MAUs who received an order via pickup dropped three percentage points on a month-over-month basis, while delivery and ship-to-home grew by six points and four points respectively.

Decreased repeat intent

The repeat intent rate, which measures the likelihood that a monthly active user will order again in the next month with the same grocery service, dropped to 56%, down four points compared to June 2021.

The month-over-month decline was largely the result of a greater than four-point dip in the more-frequent customer segment’s intent rate as the first-time customer segment was down less than one point.

And, while customer satisfaction with the services operated by grocers continued to trail those of mass/discounters relative to intent rates, the gap between grocers and mass/discounters shrank nearly 50% to just over four points in July versus June 2021.

Increased cross-shopping between grocery & Target or Walmart

For July, the share of online customers who used both a grocery service and any mass/discount service to buy groceries contracted to 25%, down about three percentage points versus the prior month.

The downtick for July was attributed to fewer grocery customers shopping with mass/discount retailers other than Target or Walmart, as cross shopping with these two retailers increased between the June and July months.

Sponsor Message & Appreciation

“Grocers should be thinking about near-term improvements that will set them up for ongoing success as the monthly results reinforce that the online customer wants flexibility and convenience,” said Sylvain Perrier, president and CEO, Mercatus.

“Progressive retailers are reducing operational sources of friction, like the frustration and uncertainty associated with wait times. At the same time, grocers need to better understand their core customer so they can build more meaningful engagement that leads to increased share of wallet.”

We thank the team at Mercatus for their continued generous support of the June research wave. Click here to see the August 23, 2021 press release.

About this Consumer Research

* The Brick Meets Click/Mercatus Grocery Shopping Survey is an ongoing independent research initiative created and conducted by Brick Meets Click and sponsored by Mercatus.

Brick Meets Click conducted the survey on July 28-29, 2021, with1,892 adults, 18 years and older, who participated in the household’s grocery shopping.

Results were adjusted based on internet usage among U.S. adults to account for the non-response bias associated with online surveys. Responses are geographically representative of the U.S. and were weighted by age to reflect the national population of adults, 18 years and older, according to the U.S. Census Bureau.

Brick Meets Click used a similar methodology in terms of design, timing, and sampling for each of the surveys conducted June 27-28, 2021 (n= 1,789); May 28-30, 2021 (n=1,872), Apr. 26-28, 2021(n=1,941), Mar. 26-28, 2021 (n=1,811), Feb. 26-28, 2021 (n= 1,812), Jan. 28-31, 2021 (n=1,776); throughout 2020 on Nov. 11-14 (n=2,067), Aug. 24-26 (n=1,817), June 24-25 (n=1,781), May 20-22 (n=1,724), April 22-24 (n= 1,651), and March 23-25 (n=1,601); and on Aug. 22-24, 2019 (n = 2,485).