Bankruptcies; Instagram Checkout and Retailers; Online Grocery Demand
Last month’s bankruptcy filing by Tuesday Morning follows a number of retail and brand bankruptcies that we have been tracking since the start of the COVID-19 crisis, including Pier 1 Imports, J.C. Penney, and others. These retailers were pushed over the proverbial financial edge by a combination of forced closures from COVID-19 precautions and an inability to transition quickly to an eCommerce-led business. We expect to see additional financial pressure as stores re-open, given they are often doing so at limited capacity and having to implement social distancing measures within a challenged economic environment.
Target & Instagram
Target and Instagram announced a new partnership where consumers browsing Target and TargetStyle posts on Instagram are able to purchase directly within the Instagram platform. The capability is part of Instagram Checkout, a feature launched in beta mode over a year ago. This marks a meaningful step forward for social commerce platforms as Target is the first mass retailer to enable purchasing directly on Instagram platform.
Online Grocery Acceleration
Online grocery usage has risen dramatically since the start of the COVID-19 crisis. On average, Food and CPG manufacturers we benchmarked indicate online as a mix of sales has grown from 10% in 2019 to 15% of their US retail business during the crisis, and these manufacturers expect an additional point of mix shift in 2016. Competition is fierce amongst retailers, with Instacart, Amazon, and Walmart in particular standing out. Our shopper studies have highlighted just how close each of these three are in terms of performance. Walmart’s Pick Up & Delivery app (formerly Online Grocery Pick Up) appears to have the slight edge with 67% of consumers giving the overall experience an “excellent” rating. Our future research will be particularly focused on Amazon Fresh as it has caught up to demand over the last few weeks, improving both assortment and delivery times.
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