Could trial offers be temporarily driving online grocery sales growth?

Online grocery sales were up 4.4% year over year in April, jumping to $8.5 billion, according to the Brick Meets Click/Mercatus Grocery Shopper Survey.

The boost in online spending was largely driven by an uptick in the ship-to-home method of grocery delivery.

Meanwhile, pickup sales was up 2.1% for the month compared to the same period a year ago, and average order value was up, despite a decline in active monthly users. 

The delivery sales category was also up 4.3% year over year. That’s due to an expansion in the monthly active users (MAU) across all age groups, which resulted in increased order volume, according to the report. 

Mass retailers, such as Walmart, grew first-party delivery services in April, which helped to grow delivery.

Ship-to-home sales experienced a double-digit increase of 10.2% for the month compared to the same period in 2023. The trend was driven by a “substantial year-over-year increase in average over volume (AOV),” the report noted. That follows an AOV decline in 2023 compared to the previous year. 

The report noted that MAU expanded moderately in the ship-to-home sales category, but order frequency fell for monthly active users, which led to a decline in order volume.

Ship-to-home captured 18.7% of online grocery sales for an increase of 100 basis points year over year. That increase was at the expense of the pickup category, which declined one percentage point to 43%. Meanwhile, delivery held steady month over month at 38.3% compared to the same period last year. 

“Delivery sales in eGrocery continue to benefit from significant interest and investment from third-party providers and Walmart,” said David Bishop, partner at Brick Meets Click, in a press release. “One question related to this growth remains whether many of the newer customers who are attracted by the trial offers will behave like streaming subscription service users who choose to use one service at a time until the ‘free’ period expires, and then jump to the next special offer.”

The size of the online grocery MAU base held steady for the month of April compared to last year with 70% of MAUs relying on one method. About 15% of shoppers used both the delivery and pickup method in April.

More shoppers shifted to mass retailers like Walmart in April (34%), an increase of nearly 800 basis points year over year. Mass retailers supplied over half (51%) of all orders to monthly active users. That’s an increase of 500 basis points year over year, according to the report. 

Traditional grocers captured a mere 30% of the MAU basis for online orders, down 280 basis points compared to last year.

“Given the recent shifts in consumer purchasing patterns, especially the increased flight-to-value and rise in cross-shopping between supermarkets and mass retailers, grocery executives need to lean on their technology partners to offer solutions that enhance the shopping experience, whether that’s online or in-store,” said Mark Fairhurst, Chief Growth Officer at Mercatus, in a statement. “Mass retailers, like Walmart and Target, have already invested heavily in their mobile apps, and are now tapping into emerging technologies like machine learning and AI to better predict and adapt to customer behavior in real-time.”