Mass merchandisers trounce supermarkets in online sales in August

The U.S. online grocery market was up 8.7% year over year in August, with reported sales of $9.3 billion, according to the latest Brick Meets Click/Mercatus Grocery Shopping Survey released Tuesday.  

Mass retailers continued to trounce their supermarket counterparts in the digital realm and continued “attracting many more customers,” the report noted.  

August was a strong month for both pickup and ship-to-home sales, but delivery experienced a slowdown in order volume, according to the report. 

The monthly active user base of online shoppers was up 5% from the same period last year, with ship-to-home growing by more than 9%, pickup 6% and delivery less than 1%. 

August saw a 5% growth of e-commerce orders compared to the same period last year, a trend that was almost entirely driven by the expanded base of monthly average users. While delivery volume fell 5% over the month, pickup and ship-to-home rose 9% and 10%, respectively. Amazon’s pure-play segments, such as its marketplace and subscribe-and-save services, saw an overall order volume increase of more than 10%, which helped drive the strong performance in ship-to-home, the report stated. 

“The combined average order value (AOV) for all three fulfillment methods grew 3% versus the prior year in August, which is below the current rate of inflation for the wider variety of grocery-related products that regional grocers often sell and extends beyond the food-at-home category,” said David Bishop, partner at Brick Meets Click, in a statement. “For grocers, it is important to see the specific trends for each method as pickup posted the highest gain of 6%, followed by delivery, up 4%, and ship-to-home, up 3%, compared to a year ago.” 

The report also noted that delivery ceded 360 basis points to other delivery methods in August, ending the month with 38% of e-commerce sales. More than three-quarters of that was captured by the pickup method, which ended the month with 45% of e-commerce sales, and roughly a quarter went to ship-to-home, which claimed 18%. 

Meanwhile, the mass merchandiser monthly average user base jumped nearly 20% for the month, while supermarkets dropped 10%, compared to the same period last year. Order frequency rose in the low single digits for mass merchants, while dropping in the mid-single digits for supermarkets. 

Cross-shopping rates between mass-market retailers and supermarkets rose 490 basis points to 34% year over year, constituting the highest level to date and more than doubling pre-COVID levels from August 2019.  

Grocery customers likely to use the same service next month rose 2 points to 60%, while mass remained steady at 68%, the report stated. 

“Online customer loyalty is increasingly elusive, and grocers should focus on creating more seamless experiences that keep shoppers–especially the first-timers coming back,” said Sylvain Perrier, president and CEO of Mercatus, in a statement. “By providing personalized recommendations and promotions, based on shopping history and personal preferences, grocers can strengthen connections with their customers that go beyond simply the transaction and increase the likelihood of repeat business.”