Grocery shopping has become a very different animal in the last year as consumers have radically altered their shopping preferences. Once a weekly physical activity relegated to weekends by the vast majority of consumers, the new grocery shopper has developed an increasing affinity over the last several months for new behaviors.
Consumers once eschewed digital channels for their grocery needs, but as the latest edition of the PYMNTS Omnichannel Grocery Report demonstrates, consumer will has shifted.
Our research shows 22.7 percent of grocery shoppers are ordering groceries online to be delivered at home more now than they did before the pandemic began, while 21 percent are ordering grocery for curbside pickup more than before, and 11.9 percent are ordering groceries online to be picked up in-store more than they did before.
Grocery shopping is now an omnicommerce experience for a growing share of consumers, and grocers looking to stay in the game and get ahead must increasingly beef up their digital offering slate — as displayed by Walmart and Tesco this week.
Walmart’s Smartbox Play
Walmart and delivery solutions startup HomeValet announced this week they will be launching a test pilot that would make it possible to delivery fresh groceries to consumers’ homes, even if those consumers aren’t there to greet them.
“If there’s one thing we know about our customers, it’s that they’re busier than ever,” Walmart SVP of Customer Product Tom Ward said in a Tuesday (Jan. 12) blog post. “The prospect of this technology is intriguing, both for customers and for Walmart’s last-mile delivery efforts.”
Delivery done right meets a consumer’s needs including around delivery time — with Walmart’s partnership with HomeValet described by Ward as “one of many solutions we’re testing” to make people’s lives “more manageable.”
The smart box offered by HomeValet can store frozen, refrigerated and pantry items at three different controlled temperature ranges, meaning boxes can sit unattended for a while after drop-off. Walmart noted the introduction of smart boxes opens up the possibility of deliveries any day, any time, and although the retailer is not looking up to follow up on that with 24/7 service, Ward did say it has “a nice ring to it.”
The pilot program will launch in the spring in Bentonville, Arkansas. Participants will get their Walmart items delivered directly into the HomeValet smart box placed outside their home.
The program clearly moves to address the reality that, according to the grocery report, 63.9 percent of survey respondents said they ordered at least one routine grocery order digitally and how they placed an order was influenced by what they needed. Smart boxes, by design, expand the number of needs Walmart can meet, and when they can meet them.
That is critical as Walmart looks to hold its lead as American’s leading seller of groceries — particularly among millennial and bridge millennial consumers — in a field that is becoming more crowded with digital innovation on all sides.
The prospect of this technology is intriguing, both for customers and for Walmart’s last-mile delivery efforts,” Ward noted in the blog post.
Tesco’s Big End To 2020
Tesco, the biggest grocery retailer in the U.K., is hailing 2020 as a record year, crediting online sales and consumers seeking luxury food items as duel boosts that sent same-store-sales up 8.1 percent year-over-year.
“We delivered a record Christmas across all of our formats and channels,” said Ken Murphy, Tesco chief executive, according to Guardian reports. The firm reported that the skyrocketing demand for digital grocery options meant Tesco over the course of the season delivered more than 7 million orders containing 400 million-plus items over Christmas. All in, the grocery reported online sales had increased by more than 80 percent over the last 19 weeks — worth roughly nearly 1 billion pounds in extra sales. The retailer also highlighted that sales in its largest stores also grew strongly as customers favored larger, less frequent shopping trips.
Those extra sales will be eaten into, though notably not entirely consumed, by the 810 million pounds in extra costs linked to the pandemic the firm will soak.
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