The sudden surge in online grocery orders triggered by the coronavirus pandemic has some retailers’ pickup and home delivery operations stressed to the breaking point.
Daily U.S. online sales for groceries jumped dramatically in mid-March, doubling levels seen earlier that month, according to the Adobe Digital Economy Index released Tuesday by Adobe Analytics. The new Index analyzes trillions of online transactions across 100 million items spanning 18 product categories.
The Index’s data also show grocery orders placed online for store pickup by consumers during the period of Feb. 24 to March 21 rose 62% over the same period last year. A rise in demand was not unexpected as state and local authorities across the nation urge social distancing and issue stay-at-home orders in efforts to contain spread of COVID-19 disease.
Most major U.S. supermarkets already offered home delivery and buy online/pick up in store (BOPIS) in 2019, before the full impact of the outbreak was clear. While grocery chains have been investing to make their pickup and delivery services even more robust, the increased demand seen in March is outpacing logistical capacity.
“Every retailer I have spoken with has been overwhelmed in the past couple weeks,” says Gary Hawkins, CEO of the Center for Advancing Retail & Technology. “The rapid spike in online volume taxed systems and the flood of business has just overwhelmed retailers’ ability to pick, fulfill and deliver orders, whether BOPIS or home delivery.” Prior to founding the Center, Hawkins was CEO of Green Hills supermarket in Syracuse, New York.
96% allow shoppers to select delivery and pickup time windows
“Now as more and more families stay home and self-isolate, grocers are finding they cannot handle the huge spike in demand and delivery timelines have extended to days even weeks,” Kimple says. “In many hard-hit areas, delivery is just not an option. The challenge is not a technology challenge; it is a human resource challenge as grocers look to staff up to handle the spike in demand.”
Further fueling consumers’ anxiety about the ability to restock their kitchen pantries and refrigerators are walkouts at grocery delivery service Instacart and Amazon AMZN by workers demanding hazard pay along with better personal protection against contracting COVID-19. Workers at Whole Foods Market WFM staged a sickout on Tuesday.
Discount retailer Dollar Tree suspended online ordering via its website in a bid to keep stores stocked with inventory.
Hawkins says grocery retailers can play an important role in easing consumer anxiety by communicating steps being taken to protect shoppers and employees. Retailers have a unique opportunity to be a “calming voice to instill confidence that we will get through this.”
Now is the time for retailers to step up and shine, says Jenn McMillen, CEO of Incendio, the customer loyalty marketing firm she founded after stints leading loyalty and customer relationship management at retailers like GameStop GME and Michaels, among others.
“The future viability of certain businesses is being decided now,” she says. “As many businesses rush to find their BOPIS, digital or online solution, remember to take customer experience and loyalty into account.
“Consumers have put their faith in you during this uncertain time. Meet their expectations now and expect future loyalty in return for being a trusted partner. Fail on product, price, timing or experience? Expect immediate repercussions, through defection to a competitor, or more long-standing effects, such as a detractor for life.