Top-line

The U.S. online grocery market generated $8.1 billion in sales during October, driven by $6.4 billion from the pickup/delivery segment and $1.7 billion from ship-to-home, reported the Brick Meets Click/Mercatus Grocery Shopping Survey fielded October 29-30, 2021.

“As the number of new COVID-19 cases in October continued to decline, key performance indicators (KPIs) for monthly active users, order frequency, and average order value are rebalancing from the record highs of 2020 and now provide a more stable and sizable base for building and forecasting the business in 2022 and beyond,” said David Bishop, Partner at Brick Meets Click.

Key Findings & Insights: October 2021

Monthly user base becomes more stable and sizeable

During October, about 50% of U.S. households (63.8 million) boughtgroceries online, whether just a few items or a full basket of goods.

Toput this inperspective, the size of the current monthly active user (MAU) base haseclipsed the total number of households in August 2019 whohad placed at least one online grocery order during the previous year.

Share of sales and orders continue to shift toward pickup and/or delivery from ship-to-home

Pickupcontinued to be the most popular way to receive online orders in October, witha monthly active user (MAU) base of 33.4 million households.

• Ship-to-home’s MAUbase had 29.8 million households but has contracted each month since July 2021.
• Delivery served 26.2 millionhouseholds in October but has experienced more volatility in month-over-monthchanges lately.

Almost 1/3 of MAUs used multiple ways to receive eGrocery orders

While the vastmajority of online grocery shoppers still prefer to use only one method – pickup,delivery, or ship-to-home – over 30% of MAUs chose to use multiple methods toget their online grocery needs met in October 2021.

The share of MAUs that received online orders via multiple methods has grown byover 16 percentage points since the start of the pandemic.

Elevated AOVs rebalancing versus pre-COVID

For October 2021, the weighted average spending per order across all three receiving methods totaled $70.65, which includesweighted averages of $85.13 for delivery, $80.88 for pickup, and $45.57 forship-to-home

Although OctoberAOVs were down across all the segments versus last year’s highs, pickup anddelivery were 12% and 18% above pre-COVID AOVs respectively while ship-to-home hasreturned to pre-pandemic levels with just a 2% gain versus August 2019.

Order frequency holding steady, averaging 2.6+ orders/month

Since January 2021, the average number of orders placed by MAUs has consistently ranged between 2.66 and 2.83, and October 2021 continued this trend with MAUs placing an average of 2.74 orders.

In contrast, pre-pandemic, the average number of online orders was significantly lower at just 2.03 in August 2019.

Cross-shopping continues between Grocery & Mass/Supercenter

The share ofGrocery’s monthly active users who also placed at least one online order with Massduring October 2021 was 25.6%, holding steady versus September 2021.

• For these households,nearly two times as many cross-shopped with Walmart compared to Target.
• The degree of cross-shopping has consistently totaled between 24.3 and 28.7% every month since January 2021, showing how a mass rival could now be a grocery retailer’s primary competitor when it comes to online grocery.

Repeat intent: Grocery still lags Mass

The likelihood that amonthly active user will order again from the same online grocery service inthe next month landed at 57.2% for October 2021, down 4.2 percentage pointsfrom the prior month.

Whencomparing repeat intent rates between retail formats for October 2021, Grocery’srepeat intent rates lagged those of Mass retailers like Walmart and Target by 2.1percentage points, or almost 4%.

This gap, while smaller than in September,signals that grocery retailers continue to have an opportunity to boost satisfactionby reducing sources of friction in their service.

Sponsor Message & Appreciation

“As we see online’s share of total weekly grocery shoppingconsistently hit the double-digits, it represents a new normal,” said Sylvain Perrier, Mercatus president and CEO.

“A sound strategy forgrocers going forward is continued investment to improve and differentiate youronline service. Incentivize customers to shop your first-party channel whileoffering them choices for receiving online orders. Leveraging a third-party lastmile provider can make sense today for multiple reasons; however, it isessential thatretailers take an integrated approach that promotes the benefit of orderingfrom the retailer’s owned experience.”

We thank the team at Mercatus for their continued generous support of the September research wave. Click here to see the November 11, 2021 press release.

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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 October 28-29, 2021, with 1,751 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 for each of the surveys conducted in 2021 – September 28-29 (n=1,728), August 29-30 (n=1,806), July 29-30 (n=1,892), June 27-28 (n=1,789), May 28-30 (n=1,872), Apr. 26-28 (n=1,941), Mar. 26-28 (n=1,811), Feb. 26-28 (n= 1,812), and Jan. 28-31 (n=1,776); throughout 2020 – Nov. 11-14 (n=2,067), Aug. 24-26 (n=1,817), Jun. 24-25 (n=1,781), May 20-22 (n=1,724), Apr. 22-24 (n= 1,651), and Mar. 23-25 (n=1,601); and in 2019 – Aug. 22-24 (n = 2,485).