In this 5-week series, “COVID-19’s Wake-Up Call: Food System Realities Reimagined,” experts from across the AVENIR GLOBAL network and global food system are exploring five new “food system realities” brought on by COVID-19, paired with reimagined possibilities and thought starters to help bring these possibilities to life.

Reality: COVID-19 is rewiring our food experiences

COVID-19 revealed foundational cracks in the global food system at all levels. But it also has expedited innovation and positive changes that were long overdue, especially in food e-commerce. There may be a return to “normalcy” in our shopping routines when all is said and done; but, when it comes to the rewiring of our digital food experiences, or where and how we shop for groceries or tonight’s dinner, we will emerge from COVID-19 fundamentally changed.

Digital disruption was already burning through grocery barriers at the end of last year. But now, 2020 has turned it to a wildfire-pace. In the United States, online grocery sales grew 22% in 2019, and this has surged to 40% so far this year, propelled by high nationwide demand from COVID-19 lockdowns.[i]

Almost half of shoppers in the United States reported buying more groceries online or making online purchases because of COVID-19.[ii] Pandemic behaviors of stockpiling groceries and supplies fueled an unprecedented frequency and quantity in online grocery purchases. While panic buying has begun to ease, the affinity for bulk buying and pantry stocking isn’t dying down. 

Reimagined: Omni-shoppertunity will redefine the consumer journey

Consumers want what they want when they want it; and it’s easier than ever – even in a pandemic (thanks, digital technology) – for them to get it.  But what’s at the heart – or stomach – of customers’ desires?

Consumer behaviors shift when values shift, and that’s been made crystal clear by COVID-19. The COVID-19 disruption significantly altered what customers value, like heightened emphasis on safety, affordability and convenience, and, as a result, behaviors are changing rapidly and dramatically.[iii]

As noted in a recent article from AT&T Business, the pervasiveness of digital experiences in our lives is such that we don’t compartmentalize our expectations anymore. We’re busy. We need help. We’ll pay more (just not the cost of shipping) for said help. Enter digital conveniences to provide the answers.

The expectations food providers must meet are now set by consumers’ best experiences across all categories – from on-demand entertainment bingeing, to seamless meal-delivery at a push of a button, to convenient crowd-sourced ride-sharing services like Lyft and Uber.

As shoppers embrace digital experiences in all aspects of their lives – especially during times of social distancing – there is no longer a perceived barrier to outsourcing their food buying responsibilities. This newfound convenience is likely to stay as social distancing restrictions are loosened.

Possible Paths Forward: Food for Thought & Lessons to Find E-commerce Success

  • More frequent online grocery shopping is leading people to shop at more retailers – so consider selling your products beyond Amazon. Consumers in the United States reported making purchases from an average of 2.3 retailers online in the past 12 months, compared with 1.8 retailer last year. Among retailers, Amazon continues to lead the field as an e-grocery shopping destination, but its untouchable reign may be coming to an end. Unlike all major rivals, the proportion of online grocery shoppers buying on Amazon.com remained flat year over year. Meanwhile, three other retailers posted more than 5-percentage-point gains in share of online grocery purchasers: Walmart (+14.9), Target (+7.2) and Costco (+6.3). Also seeing notable increases were Whole Foods (+4.8), Aldi (+3.6) and Ahold Delhaize USA’s supermarket banners (+3.0).[iv]
  • Bulk buying behavior is on the rise and will likely stay at these levels – so plan your production cycles accordingly. According to the United States Chamber of Commerce,[v] COVID-19 has introduced a new generation of shoppers to stock-up and buy-in-bulk shopping. Warehouse club Costco saw a coronavirus-related surge. Sales were up 13.8% year-over-year in February, the company reported in its second quarter earnings release.

But let’s not forget that this behavior also reflects a striking technology, geographic and socioeconomic divides. It is a luxury to access this click & collect technology, pay premiums for delivery and avoid the grocery store altogether. Given the food security issues playing out globally due to COVID-19, we can’t lose sight of these stark divides in food access. If your product cycle can accommodate food donations, consider building them as smaller, steady installments into production planning.

  • Beyond the obvious convenience and safety measures, grocers’ online efforts are fundamentally designed to improve the customer experience – so focus your consumer and digital experience on engagement and retention. This is true with or without COVID-19; but the pandemic has brought about even greater competition for superior customer experience.  Not only do grocers have to contend with – and deliver on – elevated customer expectations; they must do battle for consumers’ convenience-driven cravings, with an increasingly expanding and complex digital food ecosystem, which includes:
    • Third-party grocery delivery & food delivery: The pandemic has  shown both retailers and restaurants how dependent they have been on the innovation of third-party vendors, and how little control they’ve left for themselves in protecting their profits/revenues and their customers’ experiences.
    • Restaurants-turned-grocers: Panera launched Panera Grocery, a service that provides contactless delivery of produce and pantry items alongside the cafe’s menu items. Subway also introduced Subway Grocery at more than 250 restaurants in select states, which allows customers to buy standard menu items, individual ingredients and some items in bulk. Beyond these chains, restaurants of all sizes across the country also quickly pivoted to sell pantry items and fresh produce, alongside their meals for delivery or take-out. This could be a lasting change.
  • Consumers buy what they can see and what they can find – so make sure your customers know where to find you. For e-commerce brands, one of the biggest takeaways from the COVID-19 pandemic is that you’re in the best position to help your customers find your products. If you don’t already have tools to highlight which retailers carry your products, now is the time to invest in them. And if you do have a where-to-buy solution, you need to make sure it highlights up-to-date stock information and includes an option for getting alerts about availability, as well as ensuring you get sell-through data so you can know that the purchase paths you’re presenting to customers are working and optimized.
  • Not every digital innovation in grocery is a good thing – so only plan for what is best for your brand’s longevity. Online ordering is a double-edged sword for grocery retailers. It offers customer growth but increased competitiveness. It grows local market footprint but puts further pressure on grocers’ wafer-thin margins. It presents a packaging nightmare but allows greater customer insights than ever before.

At its core, online grocery delivery is largely unprofitable. As an AT&T survey finds, profit-per-order has worsened for 3 in 5 retailers who offer online ordering.  Other than fulfilling from distribution centers or vendor drop-ship, all other forms of online order fulfillment are margin negative or neutral. To put that into perspective, Walmart will reportedly lose $1 billion of its $21 billion e-commerce revenue as a result of its challenges integrating the Jet.com acquisition and rough margins from its next-day delivery operations.  And let’s not even get started on the unrecouped costs of packaging for delivery, and its impact on the bottom line…and the environment.

In addition, online bulk-buying behavior means higher volume of essentials filling shelves and warehouses, while fewer SKUs and new brands make it into the mix. Essentially, the little guys are being pushed out of mainstream grocery offerings. Young Foodies, a community for small and medium-sized food brands, is launching a new direct-to-consumer sales channel, Mighty Small, which is one example of how this issue is being addressed The hope is to help smaller brands that have seen their shelf space squeezed during the COVID-19 crisis.

  • Simply closing the sale is not the real win of e-commerce – so don’t neglect the one indisputable reason to embrace the omni-shoppertunity – data! As Food Marketing Institute notes, currently food retailers and manufacturers are failing to adequately share shopper data, segmentations and consumer insights, leading to missed opportunities to work collaboratively and grow sales. With the digital data collection, available only through the adoption of online shopping, grocers have the ultimate roadmap to customize insights-driven marketing programs and turn one-time online orders into loyal lifetime customers.

Kristen Ingraham, based in New York, NY, is a Senior Vice President at Padilla.  She leads digital integrated marketing and business development for the agency’s Food + Beverage Practice.


[i] Coresight Research U.S. Online Grocery Survey 2020 https://coresight.com/research/us-online-grocery-survey-2020-many-more-shoppers-buying-more-categories-from-more-retailers/

<[ii] Coresight Research U.S. Online Grocery Survey 2020 https://coresight.com/research/us-online-grocery-survey-2020-many-more-shoppers-buying-more-categories-from-more-retailers/

[iii] EY Future Consumer Index – https://www.ey.com/en_us/consumer-products-retail/how-covid-19-could-change-consumer-behavior

[iv] Coresight Research US Online Grocery Survey 2020 – https://coresight.com/research/us-online-grocery-survey-2020-many-more-shoppers-buying-more-categories-from-more-retailers/

[v] Will Coronavirus Drive Permanent Shifts in Shopping Behavior? https://www.uschamber.com/co/good-company/launch-pad/changes-in-consumer-buying-after-coronavirus-pandemic