Grocery e-commerce has experienced significant growth throughout the COVID-19 pandemic, but recent studies suggest that it’s losing share in the current high-price environment. According to a report by Progressive Grocer, grocery e-commerce’s share of total grocery sales declined from 8.5% in November 2021 to 7.9% in January 2023. What does this mean for the grocery industry, and how can retailers respond? Let’s explore.
Rising Prices, Changing Shopping Habits
As inflation affects economies worldwide, consumers have become more mindful about their spending, especially when it comes to essential goods like groceries. This sensitivity to price changes has driven some customers back to physical stores, where they can more easily compare prices and find deals.
In addition, the report reveals that many consumers perceive online grocery shopping to be more expensive due to additional service fees and less access to in-store deals or discounts. This perception, combined with the current high price environment, could be contributing to the decline in e-commerce’s share of grocery sales.
Opportunities for Retailers
Despite the challenges, there are ways retailers can adapt and continue to thrive:
Transparency and Communication: Be upfront about your pricing and fees if you sell online or do delivery. Clear communication can help customers understand what they’re paying for.
Loyalty Programs: Use loyalty programs to reward regular customers and encourage repeat purchases. This could include discounts, free delivery, or other exclusive perks.
TL;DR
Navigating a post-COVID environment can be challenging for groceries, however, the good news is that people are coming back to physical retail space. By understanding changing consumer behavior and adapting accordingly, retailers can continue to provide value and highlight the ease and convenience of shopping in-person.
