Grocers’ Websites Were Well-Prepared to Handle 2022 Digital Holiday Shopping Spike, but Struggled to Keep Pace on Fulfillment

According to Grocery Doppio’s 2022 Performance Scorecard, despite digital grocery sales reaching $128B in 2022, most digital operations remain unprofitable.

Incisiv, a next-generation industry insights firm that helps retailers and brands navigate digital disruption, and Wynshop, the leading provider of digital commerce and fulfillment solutions for local-store based retailers, revealed the findings from their State of Digital Grocery 2022 Performance Scorecard on Grocery Doppio. The scorecard provides a quantitative look back on the growth and changes in the digital grocery market in 2022, including new data for the month of December and grocers’ outlook for 2023.

Key holiday findings from the month of December include:

• 82% of grocers said that their digital commerce platforms were prepared for the holiday season spike in sales (website and apps) but only 34% said that their digital operations platforms were (fulfillment, scheduling, picking)
• Q4 digital sales increased 39% over Q3 and 58% of all grocery shoppers spent more this holiday season than they did during the holidays last year

These and other data insights are now available for download on Grocery Doppio, a free, independent source of grocery insights and data designed to help grocers jumpstart, accelerate, and sustain digital growth.

The 2022 annual scorecard is based on shopping data from 1.7 million shopper orders analyzed from January 1 to December 31, 2022, as well as polling responses from over 22,000 grocery shoppers and more than 2,000 grocery industry executives.

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Key findings from the 2022 Performance Scorecard include:

• Digital grocery continued to grow, but not profitably
  • There were $128 billion in digital grocery sales in 2022, amounting to 14.4% of all grocery volume
  • $298 million in margin was lost by the industry on their digital grocery business, making most digital operations unprofitable
  • Grocers’ own share of digital grocery reached 69% in 2022, shifting 10% away from third-party platforms

• Digital grocery is predicted to grow in 2023, despite economic headwinds
  • Industry experts cited their top three 2023 business challenges as inflation (91%), rising workforce costs (78%), and uncertain product availability (71%)
  • 77% of digital grocers ranked ‘improving fulfillment efficiency’ as the number one priority area for 2023
  • Digital grocery sales are projected to reach $146 billion in 2023, representing 15.3% of the total grocery market. 87% of all grocery shoppers are expected to order online
  • Grocery will be more omnichannel and digital in 2023, with a projected 47% increase in the number of shoppers using mobile devices in-store, a 16% increase in the number of pickup orders, and 63% of grocers evaluating or implementing in-house digital media monetization solutions

• Overall technology budgets will shrink in 2023, but spending on digital will continue
  • Upgrades to store technology are needed, according to 81% of grocery executives and 73% of store associates
  • 1 in 5 grocers will test and deploy AI capabilities, and 1 in 7 will test and deploy robotics for fulfillment
  • There will be a 0.7% industry decrease in technology budget, although 23% of grocers will increase their spending on digital by 11-16% over 2022

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“The 2022 holiday data amplified and affirmed what we have seen throughout the year,” said Gaurav Pant, Chief Insights Officer of both Incisiv and Grocery Doppio. “Grocers continue to improve their e-commerce credentials as digital sales improve, stealing market share away from third-party platforms.”

“The online shopping trends in 2022 followed a familiar pre-covid shape, observing a summer dip, and a Q4 increase,” said Wynshop Chief Revenue Officer Charlie Kaplan. “The big challenge for grocers in 2023 is to improve their fulfillment capabilities in order to keep up with demand and achieve profitability.”

Every month, Grocery Doppio brings together rich, research-driven grocery content, fact-based observations, inspiring perspectives, and deep performance benchmarks that identify improvement opportunities for grocery retailers. The site is designed specifically to help grocery and food executives optimize their digital and in-store channels and accelerate growth profitably.

To attend a Webinar reviewing the results of the “State of Digital Grocery 2022 Performance Scorecard,” on Wednesday, January 11, 2023.