US eGrocery Sales Trends with Brick Meets Click – June 2024 Insights

June U.S. eGrocery Sales Reach $7.7 Billion, Up 8% From Last Year

The latest Brick Meets Click/Mercatus Grocery Shopper Survey reveals that June 2024’s eGrocery sales reached $7.7 billion, an 8.0% increase over last year.

This rise from just over $7 billion in June 2023 can be partly attributed to the aggressive membership plan promotions — offering deep discounts on delivery services — initiated by major players like Walmart and Instacart.

We see the impact when we break down sales figures according to receiving method:

Delivery sales grew 18% year-over-year to $2.9 billion, driven by the membership deals we mentioned above.

  • Ship-to-home sales increased nearly 10% to $1.3 billion, marking its fourth straight month of year-over-year sales gains.
  • Pickup sales for June 2024 remained steady year-over-year at $3.5 billion, despite a slight decline in order frequency and average order value (AOV).

For a further breakdown of the numbers, including key takeaways and actionable advice, keep reading below — and use this data to make more informed decisions for your grocery business.

June 2024 US Online Grocery Sales Analysis

June 2024 US Online Grocery Sales

Why Are Delivery Numbers So High?

With Walmart and Instacart both offering deep discounts on their annual membership fees, Delivery’s MAU base and order frequency numbers both experienced a significant boost.

These promotions highlight the power of strategic discounts in driving customer engagement and retention. The sustainability of these gains, however, depends on how well Walmart and Instacart meet the needs and expectations of their new annual members.

Whether it’s successful or not, this continued drive to promote membership plans shows that the big players are recognizing customer retention as being crucial to long-term success. Further analysis of the numbers show that the people signing up for these membership plans are likely existing or lapsed customers rather than entirely new ones.

The promotional efforts are converting casual users into committed members — at least in the short-term.

The Latest On Cross-Shopping

Cross-shopping rates for June 2024 remained high, with nearly one in three customers buying online from both Grocery and Mass formats during the past month.

Walmart remains the most attractive retailer for cross-shopping purposes. Overall, 31.6% of grocery store shoppers also received an online order from a Mass retailer in June. The share of grocery customers who received online orders from Walmart specifically reached nearly 22%, up 150 bps versus last year.

Ship-to-home’s Recent Revival

Ship-to-Home sales climbed nearly 10% versus last year to $1.3 billion, driven by higher AOVs despite a slight contraction in its MAU base and a dip in order frequency. Ship-to-Home finished June with almost 17% of eGrocery sales, up 26 bps compared to a year ago.

This marks the fourth consecutive month of year-over-year sales gains after a period of decline.
It should be no surprise that Amazon is driving the recent success of this segment, and with the Amazon Prime Days promotion happening in July, we should anticipate a boost to this month’s numbers as well.

Are Customers Happy with Their eGrocery Experience?

June’s repeat intent rates — measuring the likelihood of a customer completing another online order in the next 30 days with the same eGrocery service used most recently — dropped nearly seven percentage points to 56% compared to last year

This decline should be especially concerning to grocers. Not only was it driven by the most frequent users of a given service – those who completed four or more orders during the past three months — but Grocery’s repeat intent rate declined twice as much as that of Mass Merchants.

10 Key Takeaways from June 2024 eGrocery Sales:

  • The U.S. eGrocery market reached $7.7 billion in June 2024, representing an 8.0% year-over-year increase.
  • Despite YOY increases for both Delivery and Ship-to-home, Pickup remains the most popular eGrocery receiving method with sales holding steady at $3.5 billion.
  • Delivery sales surged 18% to $2.9 billion, supported by strong promotional activities.
  • Ship-to-home sales increased by nearly 10%, driven by higher AOVs despite fewer orders.
  • The overall eGrocery MAU base expanded by 4%, driven by the same promotional efforts that led to Delivery’s increase working to reactivate lapsed users.
  • Cross-shopping between Grocery and Mass retailers remained high, with 31.6% of Grocery customers also shopping with Mass Retailers.
  • The share of grocery customers who received online orders from Walmart specifically reached nearly 22%, up 150 bps versus last year.
  • Repeat intent rates fell to 56.0%, driven by a drop among the most frequent users.
  • Grocery’s repeat intent rate dropped twice as much as the Mass Merchant’s repeat intent rate.
  • The Mass format increased its share of the eGrocery market to 42%, while the Supermarket format fell to 39%.

Strategic Recommendations for Grocers

Provide Value Where It Isn’t Already Available

Grocers should identify and promote services that Walmart and Instacart don’t offer or are less motivated to provide.

The big players might be driving the increase in Delivery through their promotional offers, but that means they’re leaving the door open for grocers to increase their offerings around Pickup — still the most popular eGrocery receiving method.

While Walmart doesn’t typically charge a pickup fee, many regional grocers do. That policy can be turned into an advantage. Here’s how:

By offering subscription plans that promote waived pickup fees and/or expedited service, grocers can demonstrate improved value to customers and create a unique value proposition that’s not already available from other retailers.

We know many customers appreciate the convenience and immediacy of Pickup. By adding an increased sense of value to this aspect of your service offering, you can appeal to a larger customer base including lower-income households that are more sensitive to price changes.

This allows grocers to promote the convenience, efficiency, and value of Pickup — which has a significantly lower cost-to-serve than Delivery. It’s a win-win for both consumers and grocers.

Win Over Lapsed Customers

We can tell lapsed customers had a big impact on June’s eGrocery sales numbers because the overall eGrocery MAU base expanded by nearly 4% versus June 2023, while the total pool of households that have ever bought groceries online grew just 14 bps over the same period.

The difference between these two figures suggests that less-frequent users making another order and lapsed customers giving the service another chance drove the increases we saw in Delivery sales and MAUs.

Walmart’s promotional initiative has proven that lapsed customers and less frequent users are willing to give eGrocery another go — if the incentives are right.

Now it’s time for grocers to use this information to their advantage instead of letting Walmart reap all the benefits.

But how?

Offering heavy discounts on delivery services isn’t feasible. The objective is to increase profitability, not risk it. Instead, grocers need to utilize technology to do more with less.

Specifically, that means using automated campaigns to target lapsed customers.

With a contextualized commerce solution like AisleOne, grocers can better utilize their first-party data to automatically deploy specific engagement strategies and individualized offers based on key customer segments — including high spenders, new accounts, churning, and, of course, lapsed.

Find Your New Competitive Advantage

Utilizing technology in this way — integrating personalized and targeted promotions into your first-party platform experience — emphasizes the traditional strengths in high-level, in-store customer service that grocers have always maintained.

When technology and tradition are combined like this, grocers are finally able to provide customers with a digital experience that Mass Merchants are unable to match.

With the increasing market share being taken by the larger retailers and with repeat intent rates declining, this is more vital than ever.

Provide Customers With An Experience That Brings Them Back

The strategies being described above are ultimately about providing an enhanced customer experience.

To bring back lapsed customers, to ensure this month’s shoppers use the same service again next month, and to reduce the cross-shopping numbers that remain around a third of customers month-to-month, grocers must focus on streamlining every aspect of the customer journey.

In theory, that means reducing friction points and making the shopping process as smooth and convenient as possible. In practice, that means optimizing website and app interfaces, providing quick access to frequently purchased items, and ensuring efficient order fulfillment.

To do this at scale, grocers need to utilize the available technology to take control of their customer’s experience and deliver a level of service that differentiates them from all of the competition.

Closing Thoughts

This month’s sales data makes plain some of the competitive differences between Mass Merchants and grocers.

While we often think of Walmart’s market advantage strictly in terms of per product pricing, their ability to offer deep promotions on services has become more of a focal point over the last couple months.

While promotional strategies and increased engagement from lapsed users have driven June’s gains, grocers can learn from this shift, and focus on finding their own competitive advantage.

Month-to-month, we often emphasize the importance of leveraging technology to grow customer loyalty and enhance the overall shopping experience. And once again this month’s data suggests the need for grocers to blend technology and tradition to provide the type of digital experience that competitors can’t match.

As always, thank you for reading.

For more information related to the Brick Meets Click/Mercatus June 2024 Grocery Shopping Survey, read the full press release.

Speakers

Mark Fairhurst Headshot

Mark Fairhurst

Chief Growth Officer, Mercatus

David Bishop Brick Meets Click

David Bishop

Partner, Brick Meets Click