The Grocery Ecomm Flywheel: Part I

The Grocery Ecomm Flywheel: Part I

2020 has blurred the senses a bit, and it’s easy to forget just how massive the acceleration was in grocery ecommerce that occurred over the last 6 months.  Broadly speaking, from January to July, grocery ecomm doubled in size1.  This was of course due in large part to a significant amount of the population being forced to wade into online grocery waters that they may have been wary of.  The headlines though tend to glaze over the fact that the flywheel was spinning quite well before March came in like a lion (spoiler: it did not leave like a lamb).  With all that evolution packed into a short amount of time, one might make the assumption we have to be reaching a point of ecommerce plateau.  We wanted to dive into three key themes that seem to be continuing to power the flywheel. In Part 1 we will focus on Consumer trends and behaviors, and will revisit Retailers & Delivery Providers in the coming weeks.

  • Consumers: $ & behavior
  • Retailers: Innovation
  • Delivery Providers: Growth & Acquisition

Follow the money

We’re suckers for hard data here at Basketful, and the stats that continue to trickle out regarding shopper behavior in the grocery space has been compelling.  Conventional supermarket grocery sales grew 17.9% y/y during the first 4 weeks of June, after a red hot 23% in May.  As a comparison, supermarkets saw 1.6% y/y growth in the year prior to COVID-19.  Bank of America summed it up well, saying “while we expect overall grocery spending to moderate further as restaurants and non-essential business gradually reopen on a state-by-state basis, we believe growth is likely to remain elevated in the near-term with likely some time before restaurants are able to return to 100% pre-COVID-19 capacity”.2 

Of course the most closely followed story line in grocery is the continued growth of online pickup & delivery vs traditional brick and mortar.  Before the pandemic struck, online grocery share was hovering in the low single digits depending on your source of information.  According to Bank of America card data, about 5% of all grocery purchases were occurring online in January, and skyrocketed to 10.2% in April.  May data reveals a slight decrease, perhaps an indicator of some plateauing.  The million dollar question that remains is how much of that share increase will stick as restrictions ease?  Bain & Co has estimated that 40% of COVID-19 driven 2020 growth will stick3.  Where we land 2020 will of course depend on not just consumer behavior, but the potential of a second wave of COVID-19 restrictions that could cause another surge in distanced shopping. 

Weekly trends illustrate the magnitude as well; since April 1, when the majority of online grocery momentum hit, we have only seen 2 weeks below 100% y/y growth—the majority of weeks seeing 150%+ y/y growth. 

Diving into the behavior within online sales growth is also intriguing.  Brick Meets Click recently released their June scorecard which details recent months and compares to pre-COVID.  A trifecta of behavior indicating more comfort with online grocery seems to be playing out: more shoppers than ever (+283% Jun20 vs Aug19), a higher spend per cart (+17% Jun20 vs Aug19), and increased frequency (+90% Jun20 vs Aug19)4.

Continued share growth, more online shoppers, more being spent per cart, and increasing frequency are strong indicators for the back half of 2020.  Where will 2020 overall land?  We don’t fashion ourselves as prognosticators, but landing the year with 7-8% of all grocery occurring online seems like a reasonably conservative estimate.

That leads us to our final thought, the importance of the bi-modal grocery shopper.  While it’s tempting to focus on one format or the other– the tried and true 150+ year old brick and mortar engine that’s solidly growing, or the newbie online grocery platform with explosive growth and innovation–in reality our consumers are dancing between both.  Whether you’re a brand or a content provider, brand and shopper marketing needs to be able to bridge the digital and physical shopping experiences.  Better connecting the inspiration that occurs online, and moving that down the funnel to a digital cart or a brick and mortar cart is now foundational, and more important than ever.

Learn more

Basketful makes your content shoppable across 14,000+ stores, converting content to commerce.  Our shoppable landing pages create a high fidelity path to cart for fast moving consumer goods including Food, Beverage, Alcohol, Health & Beauty, Baby, Household and Pet brands.  In addition, the Basketful Shopping List App allows consumers to shop, share, and save their products for checkout Online or In Store.  Drop us a line at to learn more.

Bank of America 7/9/2020 analysis

Nielsen June 2020 & Bank of America 7/9/2020 analysis

3 Bain, July 2020 Report

4 Brick Meets Click, June 2020 Report


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