Daily Insights

Groceries in Mirror Are Cheaper Than They Appear

By: Jason Yu | Mar 20, 2019

Online grocery is a rapidly expanding channel. The value of the US online grocery market more than doubled from 2016 to 2018, and grocers are expanding their fulfillment methods to capture a piece of the pie. More than half of retailers analyzed in Gartner L2’s Digital IQ Index: Grocery fulfill their own deliveries, and just over half offer grocery pickup as an option.

However, just letting customers order groceries online might not be enough for brands to succeed.

In a 2018 survey in which consumers were asked why they didn’t expect to buy groceries online, 42% of respondents listed paying delivery costs as their top reason. Yet grocers are failing to guide hesitant customers across this pain point. Just 42% of brands in Gartner L2’s study offer free delivery, a sizable 10% increase from 2018, yet low enough to serve as an edge to sway customers away from competitors.

In what may be a move to appeal to suburban shoppers, a majority of grocers that offer free delivery also offer free pickup, with almost half of brands allowing shoppers to reserve a pickup window to receive their goods. In some instances, brand associates may even deliver groceries to the car as part of the service. In conjunction with the ability to include special instructions (i.e. unripe bananas), this helps provide a pickup experience that mirrors in-store shopping. Facilitating an overall seamless and positive experience can help brands capture and keep digitally savvy customers.

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