Grocery retail, particularly online grocery, could be a big winner amid consumer fears of the spread of coronavirus.
It’s not a matter of if we’ll see numbers for online grocery go up, it’s how soon, and how much. In Korea, for example, the growth is in triple digits, according to this MarketWatch article.
But, is e-commerce in the U.S. ready for the surge?
I have my doubts.
Amazon and Walmart, two of the most well-equipped and popular services, are telling customers to expect delays and are dealing with price gouging among third-party sellers.
Friends of mine who work in retail are likening the increase in demand to Thanksgiving rush, every day. My husband went to Costco over the weekend and they were…wiped out…of toilet paper and other essentials. I went to Walmart this evening and there was no bleach to be found on any shelf.
I even saw a post on Facebook marketplace from some opportunistic weirdo who thinks they can get $30 for a small bottle of Purell hand sanitizer. I really hope that was a joke.
I talked with FMI – The Food Industry Association about retail response, and they assured me there shouldn’t be rationing, and that retailers are doing as much forward buying as possible. But the state of my local grocers makes me a little nervous.
I think of what it was like when Austin was bracing for Hurricane Harvey in 2017. We weren’t expected to get a direct hit, but people were still doing the Texas equivalent of the “French Toast Forecast.” (Here, it’s more like chips, salsa, and guacamole, because no one wants to get stuck with bread, eggs and milk if the power’s out all day.)
I elbowed my way through H-E-B’s aisles, dodging the curbside pickup shoppers. They actually outnumbered regular shoppers. I’m sure H-E-B had to call in reinforcements to cope with the demand.
Is your operation ready for the rush?
Bill Bishop, chief architect for Brick Meets Click told me there’s not a lot of data to support the bump in online grocery—yet.
“It seems to me that it’s inevitable given how concerned people are about the virus,” he said. “The good news is that most grocers have a fair amount of unused capacity to fulfill online grocery orders so, at least initially, there will be no service delays.”
Online grocery does still have to contend with the out-of-stocks going on in-store.
“Our guess is that the virus will trigger households who had thought about buying groceries online who hadn’t done it yet, to give it a try and this will include buying fresh produce online,” he said. “It’s never easy to order groceries for the first time online, but after that it gets easier and more convenient.”
The bottom line?
“It seems a sure thing that new shopping behaviors will be created as a result of this emergency,” he said.
