Walmart favored over Amazon among online grocery shoppers
- Walmart has officially surpassed Amazon as the online grocer of choice among consumers, according to a survey from Retail Feedback Group. Of those surveyed, 33% said they most recently visited Walmart’s site for groceries, while 31% chose Amazon. Local supermarkets came in third place with 26% of shoppers, presumably due to local grocers that partner with Instacart and other third-party delivery services.
- The report also found that online food shoppers are more willing to purchase perishable items online, such as meat and produce, with around 50% more online shoppers reporting they've made purchases in these categories compared to last year. However, many people still prefer to shop in store for those categories. This has ultimately held back the growth of online grocery shopping in the U.S., the report noted.
- Retail Feedback Group also stated that that half of online grocery shoppers plan to purchase more products through the channel next year.
Walmart and Amazon have been in a fierce battle over grocery dollars this year, showing just how much the omnichannel experience has evolved as a brick-and-mortar giant challenges an e-commerce behemoth.
Last year, Retail Feedback Group found that Amazon was the online grocer of choice among 36% of shoppers surveyed while Walmart had just 26% of shoppers, but obviously a lot has changed in a year. Walmart has been using its physical store locations to boost e-commerce operations, bringing curbside pickup to around 2,000 of its U.S. locations and adding features such as pickup towers in-store. It has also invested heavily in improving its e-commerce capabilities and is even testing pickup-only spots. Much of this goes well beyond anything Amazon is capable of doing with its existing physical grocery footprint.
Amazon is determined to keep ground from Walmart when it comes to delivery and pickup capabilities, adding new cities to its list of grocery pickup and delivery from Whole Foods on a regular basis. It will be interesting to see what the Amazon does next in its efforts to catch up with Walmart, though it’s going to be difficult to take the lead back after such an incredible surge from Walmart this year. There’s still some work to be done with Amazon’s grocery strategy and how it will operate AmazonFresh, Whole Foods and Prime Pantry to offer a cohesive shopping experience.
Despite Amazon and Walmart’s apparent dominance, local supermarkets using Instacart and similar services are still a driving force in online grocery. Online grocery sales are expected to quadruple in the next five years, and while Walmart and Amazon have captured 28% of the total online grocery market, there is plenty of room for other grocers to have a dominant presence. As local supermarkets continue to invest in their e-commerce efforts and partner with savvy third-party delivery services, it’s highly possible that shoppers will trend toward choosing their local store for online groceries.
According to the survey, online grocery shoppers are willing to purchase perishable items online more often than they used to. This could be a result of both confidence from grocers that they can properly fulfill fresh food orders online, and trust from consumers that their grocer will provide high-quality fresh foods. Costco, for example, just added produce, meat and seafood, and dairy to its online same-day delivery grocery offerings. As retailers become stronger in fulfillment, improve delivery times and bring down fees, shoppers are going to become more willing to buy their fresh foods online.
This is in no way the end of the grocery battles, and we can expect to see the lead changes continue among top retailers in the coming months, and even years, as online grocery shopping continues to grow.
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