- Digital grocery buyers have now reached critical mass in the US.
- Insider Intelligence outlines the top five brands and how they’re meeting unique consumer needs.
- Do you work in the Ecommerce and Retail industry? Get business insights on the latest tech innovations, market trends, and your competitors with data-driven research.
Grocery shopping has drastically changed over the years—and digital alternatives became a necessity after the pandemic struck. Amid mandatory quarantines and social distancing guidelines, many US consumers turned to online grocery for the first time to minimize their contact with others.
As a result, US digital grocery buyers have now reached critical mass. This year, nearly half of the US population will make at least one digital grocery purchase. US digital grocery sales grew 63.9% year over year (YoY) in 2020 and will grow another 12.3% in 2021, reaching $122.39 billion. Sales will nearly double by 2025, reaching $243.67 billion. Of this total, delivery through third-party intermediaries will make up 28.8% of digital grocery sales in 2021.
Looking ahead, digital grocery sales will continue to see double-digit growth in the years to come. Between 2021 and 2025, we expect sales to nearly double with more than $121 billion coming into the market.
Learn how the leading online grocery brands are differentiating their offerings to capture a piece of this growing consumer base.
Best online grocery option for shopping local: Instacart
Delivery fees: $3.99 for same-day delivery on orders over $35; can be $5.99-$9.99 for popular delivery time slots
Other possible fees: Heavy item, alcohol, service, pickup
Premium membership option: Instacart Express ($99/yr) gets unlimited free delivery for all orders over $35 and lower service fees
Contactless delivery available: Yes, a shopper will leave it at the door
Accepts EBT: EBT cards are accepted at participating Aldi and Food Lion stores; EBT cash is not accepted
Instacart brings together local supermarkets on one platform. Customers have a dedicated shopper who communicates via text to let them know when something isn’t available or if certain groceries have been swapped. The service doesn’t require a membership to shop, and is available in most zip codes throughout the country.
According to Insider Intelligence’s US digital grocery forecast, Instacart is the dominant player with 73.8% of third-party intermediary grocery sales and will generate $26.07 billion in sales through 2021. Instacart and other third-party delivery services have staked their claim in digital grocery, now generating more than one-fourth (28.8%) of digital grocery sales. While third-party sales will continue to grow, their business model of partnering with legacy retailers may not be scalable in the long term, as these retailers are expected to continue investing in delivery systems of their own.
Pros: Order via local grocery stores, no membership required, most widely available delivery service
Cons: 5% service fee, delivery fees go up at more popular times
Best online grocery store for budget shoppers: Walmart
Delivery fees: $9.95 on all orders
Other possible fees: None
Premium membership option: Walmart Plus ($98/yr) gets free delivery on orders over $35
Contactless delivery available: Yes, leave at door
Accepts EBT: Yes on pickup orders
Shopping online at Walmart Groceries means customers can get the same low prices they’ve come to expect from Walmart’s big-box items for all their fresh goods.
Walmart Inc. is the No. 1 retailer in digital grocery and will remain on top, at least through 2023, according to our US digital grocery forecast. We also project that Walmart will see a significant shift to digital in the coming years; By 2025, 19% of Walmart’s grocery sales will occur online.
Pros: Prices are the same as in-store, no service fees beyond the $9.95 delivery, free pick-up option, free delivery for Walmart+ members
Cons: Customers can only schedule for same-day or next-day delivery, can’t see delivery availability until after customers fill their carts
Best online grocery for Amazon Prime members: Amazon Fresh
Delivery fees: Free on orders over $50
Other possible fees: None
Premium membership option: None
Contactless delivery available: Yes, leave at door
Accepts EBT: Yes, and a Prime membership isn’t required
The biggest advantage of using AmazonFresh is the ability to shop Whole Foods Market produce and prepared foods. It’s free to use for Prime members, and customers get free delivery on orders of $50 or more.
Amazon’s share of digital sales will continue to grow even though the company owns Whole Foods Market and is expanding its offline grocery footprint with Amazon Fresh stores. The retail giant has made noticeable inroads by opening fulfillment centers dedicated specifically to Whole Foods and Amazon Fresh delivery.
Pros: Free access with Amazon Prime membership, free delivery over $50, Whole Foods 365 products available, can order through Alexa
Cons: Customers must be Prime members to order
Best online grocery option for bulk items: Boxed
Delivery fees: $6.99 on orders under $49, free on orders over $49
Other possible fees: None
Premium membership option: Boxed Up ($39/yr) gets free shipping on orders over $20, cashback rewards, and exclusive discounts
Contactless delivery available: Yes, leave at door
Accepts EBT: No
Boxed delivers bulk goods to customers’ homes at discount prices without a membership fee and the delivery fee is waived for all orders over $49.
Pros: No membership required, prices match or beat big-box bulk stores like Costco
Cons: Doesn’t sell perishable groceries like produce
Best online grocery store for organic groceries: Thrive Market
Delivery fees: Free on orders over $49
Other possible fees: None
Premium membership option: The service itself is a membership
Contactless delivery available: Yes, leave at door
Accepts EBT: Not currently, but customers can apply for a free membership
Shop for natural and organic products at wholesale prices from Thrive Market. If customers prefer shopping organic, Thrive Market has a huge selection of fresh produce, dry goods, and more.
Pros: Makes it easy to shop according to diet, makes natural and organic foods more accessible
Cons: Membership required, no perishable foods available to order
