Grocers Adapt to the New Normal of Delivery
Empty grocery shelves, both physical and digital, have become a symbol of how COVID-19 has had far-reaching impacts on communities and supply chains around the globe, JLL reports. In the hunt for essentials that have become difficult to find, people have turned to online shopping, accelerating the adoption rate of grocery delivery services.
The household penetration rate of grocery delivery and “click-and-collect” pickup services in the U.S. rose to 31% on March 23 to March 25, compared to 13% just six months earlier, JLL says, citing data from Brick Meets Click. More than 40% of Americans who ordered grocery delivery the week ending March 13 tried it for the first time.
“Grocery delivery will be the biggest long-term beneficiary, as it was expected to grow before COVID-19, but this is accelerating the rate of change and the adoption curve is happening faster than it ever could have organically,” says James Cook, Americas director of research, retail, JLL.
He added, though, “The pandemic has also underscored the need for physical grocery stores. We expect long-lasting conversions to grocery delivery, but not full conversions. People will order online and use click-and-collect and visit physical stores, just like they are doing now.”
The rise in delivery adoption does not mean that in-store shopping has fallen. Actually, says JLL, it’s the opposite, with a spike in demand for groceries in-store, partially due to limited availability online.
Certain items available to order in early April via e-commerce channels now note that they won’t ship until late May. Others aren’t available to order at all.
The unavailability of grocery delivery windows, the “out of stock” memos on major e-commerce platforms, and even the cancellation of certain online orders where supply was miscalculated, were something rarely experienced before this crisis, said Peter Kroner, JLL’s manager, investor research, industrial.
It’s driven people out to stores in droves. This has grocers and e-commerce companies racing to adapt and keep people safe, says JLL.
“Physical retail and the supply chain that powers it are acting as extremely important stabilizing forces in society right now,” Kroner said. “When the digital and physical shelves are restocked with staple items, most notably in this environment, toilet paper, it will signal a return to normalcy: a psychological calmer.”
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