The COVID-19 pandemic has brought about a myriad of behavioral changes, and among the behaviors most interesting to me was the rapid escalation of using technology to order groceries and from a restaurant. I remember standing before an audience a few years back talking about e-commerce across retail and how the food and restaurant industries were just in the early stages of the digital era. I asked the audience to imagine a world five or six years into the future when grocery and restaurant orders would be double what they were that day. No one in the room that day, including me, thought we’d get there so soon, but because of the coronavirus, we did.
For grocery shopping, online ordering for both pick-up and delivery was growing before the crisis. As consumers looked to minimize exposure outside of their homes during the pandemic, this trend picked up considerable momentum. By mid-April, online grocery buying was about 77% higher than before the crisis and in May, 40% ordered groceries online for delivery or carry-out compared to 28% same month year ago. This has the potential to reshape the grocery retail landscape. Retailers who are more developed in their digital capabilities and have strategic partnerships with third-party platforms will likely emerge from this crisis stronger than their peers.
Digital foodservice orders represented 5% of foodservice visits in January 2018 and by April 2020 the share of digital orders increased to 20%. Digital restaurant orders increased by 138% in May. Certainly this growth was accelerated by the mandated dine-in closures that happened across the country in March. Overnight the U.S. restaurant industry, for the most part, became totally reliant on carry-out, delivery, and drive-thru operations to stay in business, and digital ordering became the linchpin. Digital ordering through restaurant and third-party apps as well as restaurant websites enabled restaurants to quickly pivot and provided consumers with the safer option of remote ordering and delivery. Not only did the necessity of the time accelerate digital orderings, but it also brought in new users. For example, new users currently represent 48% of third-party foodservice delivery app users.
Over the last three months restaurant operators, grocery retailers, and third-party platforms have all expanded their capacity for digital and delivery during the pandemic. The consumer also learned during this time new capabilities for frictionless and contactless food acquisition. These benefits aren’t likely to be shelved just because the pandemic fades. While we may settle down to a more normal pattern, I expect these behaviors to remain.
Upcoming Event
IFMA 2020 Virtual Marketing & Sales Conference
Presentation Title: Finding Data-Driven Opportunities for Growth
Presenter: David Portalatin, Vice President, Food Industry Advisor, The NPD Group
Date & Time: Thursday, August 13 at 12:00pm CT
Location: Virtual
Description: A fact-based analysis of how COVID -19 has reshaped the foodservice industry not just for today but for tomorrow. This data-driven session will explore operator segments, product categories, product formats, and geographies revealing insights that will help manufacturers collaborate across the supply chain. Prepare for the road to recovery by learning what has happened and how to overcome headwinds in the future.
2nd Annual Trends and Innovations, a Sosland Publishing Seminar
Presentation Title: Embracing the OMinchannel Opportunity
Presenter: David Portalatin, Vice President, Food Industry Advisor, The NPD Group
Date and Time: Wednesday, August 26, 2020, 2:00 - 4:00 p.m. EDT (1:00 p.m. CDT)
Location: Virtual
Description: Finding white space in the rapidly evolving retail marketplace is difficult. Stay a step ahead by learning about how consumer perceptions of different retail models are affecting purchasing patterns.
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