How Coronavirus Is Impacting Online Grocery in the United States

Generally speaking, the United States lags behind in grocery ecommerce adoption. With consumers less willing to buy groceries online, the gap in grocery ecommerce adoption between the United States and a country like China which has the world’s largest online grocery market is, needless to say, sizable. But as the United States grapples with the reality of the COVID-19 pandemic, more popularly known as coronavirus, we’re predicting that the coronavirus outbreak in the United States will be a major catalyst for widespread online grocery adoption by American consumers.

Throughout the last six weeks, we’ve already seen an increase in usage and orders, even prior to the spread of the coronavirus on U.S. soil. More than that, we anticipate seeing CPG brands supporting retailers with media strategies, to help push ecommerce options to consumers who choose to purchase online instead of visiting brick and mortar locations.

With the outbreak reaching the United States, families and workers across the country will look to prepare and arm themselves with every preventative measure. “As evidenced in China and now the United Kingdom, coronavirus causes inventory wipeouts in grocery stores, as worried consumers stock up on non-perishable foods, toiletries, anti-bacterial and sanitizing products,” says Nick Minnick, our Director of Retailer Development. “However, for those living in food and retail deserts in rural areas and inner cities, online grocery will be that much more important to ensure that they receive the supplies needed. And for those in more populated areas, human-to-human contact will be inevitable in brick and mortar and people will most likely quarantine themselves to avoid spreading the virus.” 

The sudden spike in demand has disrupted supply chain operations for nearly 75% of companies. And this is while the full impact of coronavirus is not yet quantifiable: shipping and freight times have nearly doubled already, and 62% are reporting delays in receiving goods from China. So while the demand for certain sanitizing and anti-bacterial products is at an all time high, it remains to be seen if CPG manufacturers will be able to keep up with providing supply.

Even anecdotally, it’s clear that online grocery usage is growing, particularly as brick-and-mortar shelves are wiped clean. Fear around crowds and visiting public places is mounting in the United States, leading many shoppers to shift to online delivery.

“Retailers who don’t offer online ordering and delivery or only offer limited options will experience detrimental hits to sales as consumers opt for competitors who offer ecommerce options and delivery, like Amazon and Walmart,” Nick continues. “Additionally, retailers who have their own fulfillment centers fully stocked with packaged foods, like pasta, beans and rice, will benefit as local store inventory dwindles and shelves are wiped clean.”

Our data already shows that densely populated areas, such as the New York metropolitan area are experiencing higher volumes of online grocery orders than usual, as fear about the pandemic spreads. In comparing our data to the coronavirus timeline of the last six weeks, we saw our data point spikes line up with major news releases and updates, most notably pertaining to local coronavirus cases. When global updates were released in larger cities such as Sacramento or Chicago, we saw orders sent to basket (OSBs) dramatically spike within our network of 80 million shoppable recipes, generally two or three days after the news updates.

While spikes aren’t uncommon, notably surrounding holidays or other planning-heavy moments in food, we typically don’t see them at this frequency and with such large rates of change. 

And while we see users open to trying online grocery as a method of avoiding contact with others and minimizing potential for infection, the increase in usage during this phase of widespread panic could lead to a more widespread adoption of online grocery, even beyond the coronavirus craze. 

“While grocery ecommerce hasn’t grown as quickly as overall ecommerce, coronavirus is causing consumers to quickly adopt online grocery shopping and delivery at an unprecedented rate, as reported by both retailers and food manufacturers,” said Joey Petracca, Chicory’s Co-Founder and COO. “This may just be the catalyst that serves as an entryway for consumers to put more trust in having other people pick, bag and deliver their groceries. We’re closely monitoring whether this is a short-term effect or if coronavirus will have a lasting and far-reaching impact on grocery ecommerce.”

Interested in more news and insights from Chicory? You can subscribe to our newsletter here!