Name: New Normal: Grocers and delivery services adapt to COVID-19
Uploaded: 2020-04-15
Duration: 5 min 5 s
Description: Fortune explores the toll grocery delivery orders have taken on the grocery industry, and explores what it means for the future of delivery apps like Instacart.

[ MUSIC ] [ SOUND ] Hello. Hi, grandpa. I'm just calling to see if you got your delivery actually? That was a great service. They brought it down, right back to the door, and that was it. So you got the milk and eggs and all that stuff? Yup, everything. Very friendly delivery People too. You have to keep me posted. Hopefully we can get a delivery slot next time. Yeah, I'm gonna need it. Grocery store delivery apps have been the only way I've been able to help take care of family members during this pandemic. Getting groceries and essential items has become a growing concern for people all over the world. Of the world. [ MUSIC ] People are afraid to risk their health by going out to the stores, thus they're getting things delivered. They're using services like Curb- side pickup and it's become the new norm for many. [ MUSIC ] All of us have had to change the way we shop a little bit because of this pandemic. Whether it's getting used to social distancing measures in stores, or converting to, becoming converts to online ordering. And the grocers have had to meet these new expectations, these new demands, and some of them are kind of struggling to keep up with What's been a huge spike in demand for online ordering. And also people stockpiling, panic buying buying many more items than usual. So the impact on the grocery industry has been huge. I think people heard a couple weeks ago. Hey, go out stock up for two weeks you might be quarantined for two weeks have enough supply. So we saw wholesale apps Costco BJs. Those had their all time highs, right? In terms of new downloads, new installs, new users and things like instacart instacart is breaking download records for itself every single day lately. And so it just keeps hitting a new all time high. The same thing was shipped, owned by target breaking records. These are the service that we were while we're working now. [ MUSIC ] There has been several ways that this has affected our a day to day operations. The main focus is that we have been having lately are making sure that the social distancing outlines are being followed. The challenges that the shift employees are facing right now, is an overwhelming amount of orders that are being placed, and also an unavailability of products that the customers are wanting. So they're having to ask the customers while they're picking their orders out for an alternative to the actual product that they want in the first place. So the problem is simply that the existing online grocery services were not ever built or haven't been built for this kind of demand. If you look at online grocery penetration in the US prior to the coronavirus pandemic, it was at most about 4 % of people who are shopping online for groceries. In the UK where I lived, it was better or twice that. But still only 8 %. And now, I mean according to some of the figure between US. Since it's about, it's more than 40 % of the people who have been wanting to place online grocery orders during this time period, and some retails have seen demand grow as much as 700 %. There aren't enough delivery slots for people to get, to obtain. While most employers are having to lay off their employees Target and other big retails, they actually happen to hire people to keep up with demand. [ MUSIC ] Walmart and Amazon, they have been kind of on a growth tear anyway. When I look at the app data, I actually don't see a big change in trend line. Only because they are already growing at a pretty good rate. Target, might be a little bit of a different story. They have a lot less in- app activity. Target really started you know, getting a boost around the basically the beginning of March that led up into its peak of now this isn't its peak ever but peak in terms of recency had like 53, 000 downloads on March 15. Since then it has been falling. I think that was an initial like, let's go out let's go get our stuff. There are a couple other things that have happened during the pandemic that may not last. So if you look at accardo, for instance, Since their average order size before the pandemic was 50 items in an order, but during the pandemic in part because people are panic buying, they're stock piling, they've seen the average order size increase to 80 items per order, and they don't think that that will last after the pandemic passes. I think in the US there's some opinion polling about how many people actually enjoy Doing their weekly grocery shop. And it's only about like 15 % of people say that they really like going to the grocery store. So I think if people try online ordering and it works for them and they like it, they're probably gonna continue doing it after this is over the grocers are gonna have to get used to meeting that online demand. It's probably put forward their business plans in this regard by several years. No one know what to expect and where this is gonna go. We still dont know where it's gonna go completely. It beats having to go out there, taking a trip to the supermarket and not finding what you need. Thanks a million again. Okay, no problem. Okay, bye bye. All right, bye. [ MUSIC ]

Fortune explores the toll grocery delivery orders have taken on the grocery industry, and explores what it means for the future of delivery apps like Instacart.

New Normal: Grocers and delivery services adapt to COVID-19

Features

What does it mean for the future of the industry?