The effects of the massive online grocery spike in March and April are already receding as consumers get back into stores. It’s clear, though, that online grocery orders will carve out a more meaningful portion of the channel mix going forward.
“Amazon and Instacart are the biggest beneficiaries of the rapid shift to online grocery buying for delivery,” said Andrew Lipsman, eMarketer principal analyst at Insider Intelligence. “As the ultimate stock-up store, Costco was a key player during the panic-buying period and will likely benefit as it transitions more of its customers to online ordering.
“Walmart and Target are also riding the wave because of their curbside pickup prowess, though Target missed an opportunity by not yet having enabled its perishable goods inventory for click and collect. However, in recently announcing that fresh and frozen groceries have become available for curbside pickup, Target should further improve its standing.”
The retailer most adversely affected was Brandless (an ecommerce seller of food, self-care and home products), which shut down operations in February after not getting enough traction in the space. It then restarted operations in June to ride the category momentum as a last-gasp attempt to create a viable business.
While perhaps a risk worth taking, Brandless likely missed its best window of opportunity in being shut down during the Q2 boom. Other retailers still under pressure include national and regional grocery chains that haven’t properly built out their click-and-collect capabilities. Already treading on thin margins, these chains can’t afford to lose grocery trips to their competitors as orders increasingly migrate to digital.