Grocery delivery came onto the scene in a big way a few years ago and really picked up momentum during the pandemic, with companies like Voilà launching in 2020.
However, a recent report suggests that while online grocery was a popular option, it was only supplementing brick-and-mortar grocery shopping rather than replacing it.
Now, it seems retailers are facing a decline in delivery service with more shoppers venturing back into grocery stores.
Why are we seeing this happen and is it good news for the industry? Here’s a look at some major causes for the decline:
- For many people, delivery is considered a luxury, and with rent, food, and gas prices continuing to spike, it no longer falls under the need-to-have category. Even independent delivery services are feeling the pinch, with Instacart, America’s market leader, recently dropping its own valuation by 40 per cent.
- While social distancing and isolating were prevalent during the past few years, many have decided that it’s no longer necessary post-pandemic. But with so many having shifted to a work-at-home or hybrid schedule, people are now taking the opportunity to venture out of the house when they can.
- For some, it’s about the experience itself, with 83 per cent of consumers claiming to have had a negative experience with grocery delivery in the past. “There’s a trust gap between what the shopper wants to get and what the retailer fulfills,” says Peter Cloutier, growth and commercial strategy lead at Chase Design.
- Last-minute and small orders are a challenge! Now that consumers can run out to the store, online ordering can be more trouble than it’s worth. With retailers struggling to manage the gap between delivery and supply chain delays, it’s often easier for customers to visit the store in person to fulfill those needs.
- Consumers are changing their habits, becoming more health-conscious and aware of where their food is coming from. Some consumers want to read labels, confirm food sources, and have control over the fresh products they’re consuming, rather than leaving that to store employees.
Is this decline good news for retailers? In a word, yes. It’s an opportunity for retailers to improve service, better address customer needs, and – for those who get it right – to convert or keep that delivery customer base.
Experts agree that delivery and online grocery shopping will carry on into the next decade, but the landscape continues to change as the industry adapts to rising costs, a more conscious customer, and inventory shortages in the market.
