2020 was the year of the grocery delivery. From getting a hallowed prime time slot during the height of lockdown one, to ordering for loved ones shielding, or supporting local farms and producers through veg boxes, grocery deliveries have played a more important role in our society this year than ever before, writes Lucy Whittemore, VP Retail Partnerships UK, Cardlytics.
Whether it be meal kits, veg boxes or takeaways, we have been consuming more delivery services than ever before. In April 2020 at the height of lockdown one, spend on meal kits and grocery boxes soared 114% as people stayed indoors, while takeaway spend increased by 39%. But this wasn’t a one-off, it’s a trend we have been seeing way before the pandemic. For the last few years delivery services have consistently out-performed the dining sector year in year out, with spend up 19% in 2018. The move to food delivery is here to stay.
It seems as if it was only a matter of time before the world of instant (or almost instant) gratification at our fingertips made inroads into the grocery sector. And thanks to the pandemic, it certainly has.
Beyond the boom in demand, Coronavirus has also elevated customers’ expectations of delivery. The pressure for fast and free delivery has only accelerated, with previously satisfactory same-day, or even hour-long delivery slots making way for promises of fresh groceries in just 15minutes from new app-based grocery brands.
In the last month alone, Waitrose has quit their own Rapid service to focus solely on their new partnership with Deliveroo. Rapid grocer Fancy revealed its own UK expansion plan after being acquired by US rapid grocery delivery service Gopuff. While, market leader Just Eat has indicated an intention to move into grocery delivery in the UK, following it’s launch of a grocery service in Germany last week. And this is only in the last 30 days.
The platform market for grocery delivery services is booming – from the household names to new brands like Getir, Weezy and Beelivery, who are hoping to change the face of grocery shopping once and for all. Claims of fresh produce, fast and a more ‘environmentally’ friendly shopping model is tempting consumers to take note.
What’s clear is that businesses are listening to the needs of their customers. In 2021, the customer wants fast, hassle free services that come at a decent price and with minimal human contact. The data tells this story.
However, grocery brands looking to cash in on this new trend need to pause for thought. The rise of 24hr fast and free grocery delivery perpetuates the trend for lower-value, more frequent, smaller basket shops, rather than fostering greater spend, bigger baskets or more customer loyalty which grocers yearn for. And, with so many new players on the grocery delivery scene discounting is deep and rife, which makes it a competitive market to play in.
It’s clear that grocery is in the middle of a delivery services revolution, but making food arrive at our doors faster is not the only way to entice new customers in the battleground of grocery delivery.
Marketers need to double down on creating lasting loyalty amongst customers who put the most in their trolleys, most frequently, rather than those who jump from delivery service to delivery service shopping around for a cheaper deal. In the long term, the former will add far more value to a brand.
Finding new ways to offer customers value, without creating a hard-to-break cycle of discounting is key. Delivering potential and existing customers tailored rewards for delivery services on the grocery brands they use most frequently is part of the answer.
In the long term, time will tell whether the fast and the furious of this new booming grocery delivery sector will compete with the big four.