116 3rd St SE
Cedar Rapids, Iowa 52401
From online retail giants to local takeout, last year’s home quarantine period saw a boom in home-delivery services.
That wave receded this spring as vaccination numbers grew, but larger Iowa markets are likely to see continued growth in the service.
“We anticipate more customers choosing online shopping as their primary way to shop for groceries,” Hy-Vee spokeswoman Dawn Buzynski wrote in an email. “Because of this, expansion of all of our e-commerce platforms is a top priority for us.”
Aisles Online, Hy-Vee’s home-delivery service, saw orders quadruple between March and May 2020, as the initial wave of COVID-19 and subsequent precautions swept its retail region.
Customer enrollments in the chain’s delivery and pick-up services tripled, according to Buzynski.
Deliveries by Chomp “more than doubled last year and started to taper off early this year, but have leveled off and remain strong,” according to Adam Weeks, co-founder and managing member of the Iowa City-based online home-delivery service.
Launched in October 2017, Chomp delivers meals from more than 160 restaurants in Iowa City and Cedar Rapids.
“Volumes more than doubled last year and started to taper off early this year, but have leveled off and remain strong,” Weeks wrote in an email.
“Last year at this time, it was about 80 percent of our business,” said Ann French, supervisor at New Pioneer Co-op’s Iowa City store. “It dwindled since, but now we’re seeing that uptick again.”
A surge in COVID infections has prompted some customers to return to their 2020 routine, said Abby Luther, front-of-house manager and managing partner of Zeppelin’s Bar and Grill in northeast Cedar Rapids.
“We have had some people switch back to just carryout recently,” Luther said this past week. “Over the summer it’s just kind of stayed at the same pace, but with cooler weather, who knows how that will change?”
A study by the Marketing Institute at the University of Iowa’s Henry B. Tippie College of Business found online delivery services averaged 25 percent growth last year, but is predicted to grow by about 3.5 percent post- COVID-19, according to Peggy Stover, associate professor in the program.
“Online delivery services will have to expand beyond restaurants and food delivery to maintain the type of growth that was seen during the height of COVID last year,” Stover wrote in an email.
She noted some national food-delivery services have expanded to handle small retailers — independent florists, bookstores, hardware stores, bakery shops — that lack the resources to hire their own drivers.
Nationwide online food delivery went from 103.7 million users in 2017 to more than 138 million last year, according to a study by the consumer research firm Statista. Revenues grew from $18.3 billion to 26.5 billion over that period, with restaurant deliveries accounting for about two-thirds of that total.
Statista found about 25 percent of Americans expect they’ll take advantage of delivery from their local grocery store post-pandemic.
Hy-Vee home deliveries decreased as vaccinations became available but has remained “stable” since, according to Buzynski. She wrote that delivery volume typically decreases in the summer.
“This isn’t uncommon, so we cannot attribute it specifically to spread of the delta variant,” Buzynski wrote.
Hy-Vee charges $9.95 for deliveries on orders of $30 or more, or $19.90 for deliveries within two hours an order is placed.
Customers may opt for $12.95 monthly or $99 annual memberships for unlimited free delivery, again with a $30 minimum, in some markets.
Home delivery’s prospects depend on customers’ willingness to pay for it as pandemic concerns ease, according to Tippie College’s Stover.
“Whether this growth is sustainable post-COVID will depend on making a convincing argument for those who prefer to shop for groceries that online grocery delivery is worth the additional expense,” Stover wrote in an email.
Stover noted services also must address consumer worries that “porch pirates” might make off with deliveries to an unattended home.
Hy-Vee continues to hire in-store staff to fill pickup and delivery orders. In late August the chain announced it’s hiring 1,000 “flex shoppers” in both Cedar Rapids and Iowa City.
Zeppelin’s experimented briefly with home delivery by its own staff but soon dropped the service in favor of curbside takeout.
“When we shut down we did delivery, but it didn’t seem the demand was there for the cost,” Luther said.
She said restaurant management decided against participation in home delivery by other services.
“We just can’t guarantee our quality” with an outside service, Luther said. “And it’s quite a bit they charge the customer.”
The strategy for now?
“Just one day at time,” said Luther. “What can you do?”