US E-Commerce Sales Soared ‘6X’ in Pandemic’s First 15 Weeks: Web Grocer Ocado
British online grocer Ocado Group experienced a “significant and permanent global channel shift” toward e-commerce during the COVID-19 pandemic, said CEO Timothy Steiner on a Q2 investor call Tuesday. The company licenses its technology platform to online retailers throughout the world and runs nearly five dozen customer fulfillment centers (CFCs) globally in partnership with its licensees.
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Ocado’s online sales in the U.K. doubled in the first four months of the pandemic, said Steiner. “That's 15 years of growth in less than 15 weeks, and it's a global trend. In the U.S., the market year on year was up 6X. In China, we saw triple-digit sales growth.”
The sharp surge in online demand “is going to stay” in a post-COVID world, said Steiner. “There's a strong expectation that it's sustainable.” Data from the U.K., the U.S. and China all support the finding “that people who have tried the channel will continue shopping in the channel,” he said.
The COVID-19 crisis is giving consumers “a much better understanding of viruses and the transmission of disease,” said Steiner. “Everybody is taking less risk than they did historically,” and that bodes well for the sustainability of online shopping, he said. “Getting your groceries delivered to your doorstep does not cost a lot more” than going to the physical “hypermarket,” he said. “If you include the cost of your own travel to the hypermarket, we believe it's cheaper.”
The online retail opportunity is “huge,” said Steiner. There’s “enormous runway for growth,” he said. “The economics of the big bricks-and-mortar stores will start to be challenged, and over an extended time period, we see less opportunity for them.” The opportunity “is potentially as large as 75% to 80% of the market going online,” he said. “We really believe we are now seeing a redrawing of the global landscape.”