Once a small, but growing, part of the grocery industry, online ordering and delivery has suddenly gone mainstream.
Physical distancing due to the coronavirus threat is at the root of the trend, but that doesn’t mean it, or other consumer habits adopted out of necessity, will completely go away once the pandemic has been contained, say two Saint Joseph’s experts.
Customers tend to get stuck in particular buying habits and often won’t change unless something big happens to push them out of their inertia, explains John L. Stanton, Ph.D., a professor of food marketing.
As an example, he points to a trend that arose during the 2008 recession: Strapped for cash, many Americans started buying private label goods — and didn’t stop, even after their financial situations got better.
“Lo and behold, people realized that private labels were really good products and wondered why they weren’t buying them all along,” he says.
Not all changes stick like that, he adds. Purchases of organic goods also dropped during the Great Recession but bounced back once times were better. But he thinks grocery delivery, and a trend toward cooking more at home, could be here to stay even after coronavirus has passed.
“The projections show millennials and Generation Z were tending to eat out more, but now they’re going to make meals at home and realize it wasn’t so bad and do it a little more often,” Stanton says.
A 2017 U.S. Department of Agriculture study showed that millennials spent less money than other groups on food at home, made fewer trips to the grocery store and tended to focus their grocery budget on ready-to-eat foods.
The online grocery industry was growing rapidly before coronavirus — a 2019 report from Business Insider shows its market value doubling between 2016 and 2018. But that growth was coming from a small overall base. Stanton says some of the new customers will go back to their usual routine once the crisis is over, but many won’t.
“If I was the grocery industry, I’d be advertising home delivery like crazy,” he says.
But the rise in new customers for online grocery services is also exposing some of the weaknesses in many companies’ models, says Ernest Baskin, Ph.D., an assistant professor of food marketing.