Taking a page from Amazon’s book, Shipt, the Target-owned same-day delivery service for groceries, essentials and more, announced on Monday (Sept. 27) that it will hold a “Dealivery Days” event in early October. The event aims to attract shoppers with discounts on foods, cleaning supplies and personal care items, among other goods.
The deal day model has been successfully utilized by Target competitors Amazon and Walmart to boost eCommerce sales and drive adoption. PYMNTS data finds that Prime Day sales surpass Walmart+ Deal Days by a long shot, with Amazon’s revenues for its discount days totaling three times those of Walmart’s for its event ($15.4 billion compared to Walmart+’s roughly $5.5 billion). Amazon had twice as many participants (104 million versus Walmart’s 50 million), and the value of the average transaction was twice as high ($42 versus $22).
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In grocery, the one category in which Walmart consistently outperforms Amazon, Walmart kept to its track record and outpaced its competitor two-to-one by total share of shoppers — not surprising, given that for Walmart, the world’s largest grocer, the category accounts for 56% of the retailer’s total sales. Accordingly, 58% of those who participated in Walmart’s Deal Days made a grocery purchase, compared to just one in five Amazon Prime Day customers.
Of course, Shipt is not only competing with these retail giants, but also with pure-play online grocers, where the discount day model is not yet as well-established. Here, the delivery service has the opportunity to establish the category in the grocery space, beating e-grocery giant Instacart to the punch.
For many consumers, cost-saving deals could mean the difference between engaging with an e-grocery shop or staying away. A survey by PowerReviews from earlier this year found that about a quarter of people who buy groceries online said they do so because it is easier to compare products and prices than brick-and-mortar shopping. Additionally, an Offers.com survey of over 1,000 U.S. adults from earlier this year found that 26% of consumers report that their biggest concern with online grocery shopping is the extra cost. This worry was tied for the most common concern with the fear that fresh produce ordered will be bad.
Data from PYMNTS’ August study, “What Consumers Expect From Their Grocery Shopping Experiences,” produced in collaboration with ACI Worldwide, finds that the grocery delivery space is still very young. Only 8% of consumers say that their most preferred channel for grocery purchasing is buying online for delivery, while 23% of grocery shoppers overall order groceries online for delivery.
Still, research from our study The Bring-It-to-Me Economy, created in collaboration with Carat from Fiserv, finds that 46% of consumers are ordering groceries online more than before the start of the pandemic, which jumps up to about two-thirds when one looks specifically at Gen Z-ers, millennials and bridge millennials.
See also: Digital Features Can Help Grocers Win Over 43% of Shoppers
Accordingly, Shipt sales have been on the rise since the start of the pandemic. Target announced last month that in the quarter ending July 31, 2021, Shipt sales grew 30% year over year, following a 350% increase, for a 455% increase on a two-year stack.
“In the years leading up to and during the pandemic, there was a ton of growth and investment in the [grocery delivery] space. Now, demand is greater than ever for giving customers access to their immediate needs,” Ashwin Wadekar, chief of staff at online grocery delivery eTailer Gorillas, told PYMNTS in an interview. “What began as an early adopter trend pre-pandemic and suddenly became a necessity as lockdowns hit has now turned into something that consumers see as customary when it comes to their grocery shopping experience.”
Read more: Gorillas Aims to Bring eGrocery Into the Future With Lightning-Fast Delivery
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