As a global pandemic and quarantine swept the world, consumers fled to grocery stores to stock up on essentials. Then ensued the shortage of items like toilet paper and hand sanitizer, and purchases of items such as fresh produce spiked by as much as 600%. As quarantine regulations went into effect, shoppers started opting for online grocery orders rather than going into the physical stores, creating a surge in grocery e-commerce. So much so that Instacart—the San Francisco-based grocery delivery service—had a sales increase of 55% in the month of May; a 30% increase from February that has allowed it to secure a $225 million in new funding to scale its operations.
So, what does this translate to in the grocery e-commerce landscape? As it turns out, about $38 billion. In 2019, online grocery orders increased by 22% and accounted for about 2.6% of U.S. food and beverage retail sales. But recent figures show that in light of the pandemic and consumer purchase shifts, these same orders are expected to surge to about 40% in 2020, bringing the projected growth in online grocery purchases to 3.5%—or roughly $38 billion.
Without a doubt, the impacts of COVID-19 have been felt across all sectors of retail, and consumer shopping habits are changing. In fact, whether we look at actual online grocery orders or plans to place online grocery orders, both figures have more than doubled in the last two years.
|Year||Purchased groceries online in the last 12 months||Planned to purchase groceries online in the next 12 months|
Remember those purchase spikes we talked about earlier? Well, considering the fact that grocery stores remained open and supplied with most items during the quarantine, how much of that over purchasing was necessary, and how much of it will be returned? On the other side of the purchase boom, there is typically a return boom. Over the past several months, items of various types have sold out, such as hygiene products, canned, and bottled goods. So, with a surge in grocery e-commerce fueled by a global pandemic, what will happen with the items that consumers over-purchased and no longer need?
As quarantine restrictions ease, different retailers have updated their return policies. Costco is not accepting returns of toilet paper, paper towels, sanitizing wipes, water, rice, or disinfecting spray. CVS on the other hand, has stated that “Most new, unopened items purchased from CVS Pharmacy or CVS.com can be returned to any CVS Pharmacy store within 60 days.” Walmart is restricting returns of essential goods, but is also recommending that consumers start a return process online—for products in any category. And grocers in Michigan are now accepting can and bottle returns.
In a world where a global pandemic has created a pathway for grocery e-commerce to thrive, grocers need a liquidation solution to sell overstock items that can no longer be sold in grocery stores that extends beyond their omnichannel strategies. That’s where B-Stock can help. We provide retailers a private, online marketplace to auction off their returned and overstock merchandise to a large network of vetted business buyers from all over the globe. It’s why nine of the top 10 U.S. retailers are currently using our solution to offload their excess inventory—regardless of product type.
If you’re ready to tap into an e-commerce solution for your excess grocery products, request a demo.Request Demo