During the early phase of the pandemic and the subsequent lockdowns, many people trapped in their homes understandably started shopping more online. Many used to always do their own grocery shopping or go to restaurants. But with COVID-19 now part of the new normal, they have switched to having groceries and food delivered to their doorstep by the likes of Amazon, DoorDash, or Grubhub.
It’s certainly been a very lucrative business for these companies, but this might not last, warn researchers at the Rensselaer Polytechnic Institute in New York state.
In what may be the first study investigating the initial adoption and retention of delivery services during a pandemic, researchers led by Cara Wang found that a staggering 90% of people who’ve used online delivery services will likely revert back to their original shopping patterns.
“It is likely that the increased use of e-commerce is not the result of market competition, where the most efficient competitor outperforms the others,” said Dr. Wang, who is an associate professor in the Department of Civil and Environmental Engineering at Rensselaer. “Rather, an external disruption—the pandemic—significantly altered the playing field. Once this external effect is removed, some of the gains made by the delivery services will likely fall off.”
The researchers surveyed 915 Americans and classed them into four distinct consumer behavior types: the prior adopter, temporary adopter, and permanent new adopter, and non-adopter. The home delivery users were further classified into four different categories, depending on what they were most interested in: groceries, food, home goods, and other items.
Perhaps not surprisingly, grocery deliveries had the highest proportion of new adopters, followed by home goods, food, and finally other packages. But while grocery deliveries surged by 113% during COVID, almost half of these new adopters said they would not continue using this service once the pandemic is over.
Temporary new adopters accounted for a larger portion than the permanent new adopters for essential items, while there were more permanent new adopters for less essential items, the researchers added.
“Answering these questions is essential to estimate the current and future demand for deliveries,” said José Holguín-Veras, director of the Center for Infrastructure, Transportation, and the Environment at Rensselaer and a co-author of the paper. “Transportation professionals and researchers have assumed that people would still rely on delivery services even after the COVID crisis is over. However, in reality, consumers’ technology acceptance is much more dynamic and complex during a pandemic than during normal conditions. Understanding these nuanced behaviors is essential for sound transportation policymaking.”
Home delivery services have had a great run, but let’s face it — this couldn’t last forever. While many people find online grocery and food shopping appealing since it’s so convenient to have same day shipping, the costs also add up. This includes costs for supermarket chains too, which have found pivoting to online deliveries very cumbersome. Before the pandemic, when shoppers would do their groceries in-store, the burden of the work such as choosing items, taking them to checkout, and transporting them all the way home was done by the consumer. With online deliveries, staff must walk down aisles, select items from an online orders list, add them to crates, check out, and deliver. For businesses that were already operating on thin margins, to begin with, this model isn’t exactly very sustainable unless they charge more.
What this means is that many of the hundreds of local delivery startups that have popped up almost overnight since the pandemic will likely go bankrupt. The remaining few will consolidate and take over the market.
On the other hand, even after the pandemic is over, home delivery services will continue to have many more customers than prior to the first lockdowns. For many, online grocery and food shopping is so good they can’t think of going back to their old ways. It seems like we will likely see more and more fleets of cyclists and electric scooters carrying groceries on the streets in the future.
The findings appeared in the journal Transportation Research Part A: Policy and Practice.