Online Grocery Shopping: Top Grocers Compete for Business

August 10, 2018 Victoria Pallien

Fresh produce and cold dairy products waiting at your front door. No shopping carts hitting the side of your car, no shivers in the frozen food aisle, no waits on long checkout lines. With a few clicks on an app or website, online grocery consumers are quickly on their way to check out and delivery.

Despite the benefits of online grocery shopping, in the U.S., the transition to online sales has been slow for the food and alcohol category.

The U.S. is behind many other countries when it comes to buying groceries online. For example, in 2017, nearly 20% of South Korean consumers bought groceries online whereas only 1.5% of American consumers did the same. But projections are calling for a change, with the U.S. seeing a rapid rise in online food shopping volume.

Online Grocery Shopping Sales in the United States Digital Media Solutions Chart

The bliss online grocery shopping offers consumers is a new battlefield for brands as they compete for sales and customer loyalty. Large grocers like Stop & Shop, Amazon and Walmart have spearheaded innovative grocery delivery in U.S. markets. These companies offer convenience while growing their brand recognition and enhancing the customer experience.

The following grocers have mastered the marketing for their delivery services.

Peapod by Stop & Shop

One of the first delivered grocery solutions, Peapod originally offered a phone order delivery service and has remained competitive, evolving with consumer desires and technology innovations. Peapod is now an online grocery delivery service that has completed more than 40 million deliveries.

Peapod gained traction by promoting themselves as a convenient way to shop in the late 1980s. Less than a decade after introduction to the market, Peapod began to dabble in digital marketing and launched a new “internet traffic exchange program” with an objective of hosting co-marketing programs with websites that matched the interests and needs of Peapod's grocery shopping audience. The company’s pioneering delivery services are now available in 13 states in the northeast, midwest and southern regions of the United States.

With straight-forward commercials to match their convenience concept, Peapod marketing often features consumers talking about how easy the delivery service is. One of their more recent TV spots, shown below, takes a simpler approach and features their tagline: “The grocery store at your front door: Peapod.”

Whole Foods Prime Now from Amazon

In February 2018, Amazon started Whole Foods deliveries through their Prime Now service. Amazon acquired Whole Foods in a $13 billion deal in 2017, and the grocery brand is one of “Amazon’s strongest weapons.”

Whole Foods deliveries are available seven days a week in more than 15 metropolitan areas around the United States. The Amazon Whole Foods delivery order process is streamlined, like any other Amazon purchase, through the app and welcomes an audience of more than 100 million Prime members, who can track food deliveries step by step and receive important notifications.

Thanks to Amazon’s monumental brand recognition, the media was eager to cover the new Whole Foods delivery service. From the Los Angeles Times to Crain’s Chicago Business and the Today Show, featured below, Whole Foods Prime Now received promotion from dozens of news outlets, covering details about the service as well as trial runs.

Though Amazon and its Whole Foods delivery service hardly needed promotion of its own, Amazon’s acquisition of Whole Foods inspired light-hearted, clean-cut TV spots like the one below.

Walmart Grocery

Less than a month after Whole Foods started delivering, Walmart joined the fight for online grocery consumers, announcing an addition to its delivery service.

By partnering with delivery services such as Postmates, DoorDash, Uber and Deliv, Walmart Grocery expanded their delivery service to their largest market, the Los Angeles area, in addition to their existing markets in seven other states. Walmart Grocery Delivery is available to more than 40% of U.S. households and more than 100 metropolitan areas.

Given the need for rapid delivery scale because of the looming Amazon threat, Walmart has been specifically working with external delivery services instead of implementing a self-serving delivery method. The brand aims to give consumers as many options as possible at the lowest prices, and that effort now extends to grocery delivery.

Similar to the Amazon and Whole Foods delivery announcement, Walmart’s collaboration with Postmates was covered by a long list of news outlets like TechCrunch, CNBC and Fox Business. While Walmart hasn’t yet produced a TV spot for their partnership with Postmates, they released a 30-second spot for their partnership with Uber.

 

Online grocery shopping volume is growing steadily in the U.S. with marketers positioning themselves via exclusive partnerships, low delivery fees, special sales and convenient delivery times. As more grocery stores and delivery services fight for their share of the online grocery shopping pie, who will become known as the freshest, fastest, cheapest, most reliable, most convenient online grocery store? We’re about to find out.

 

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About the Author

Victoria Pallien

Victoria Pallien is a Marketing Communications Writer at Digital Media Solutions (DMS), an industry leader in providing end-to-end customer acquisition solutions that help clients grow their businesses and realize their marketing goals. Since its inception, DMS has evolved into a full-service performance marketing company that services firms within highly complex and competitive industries including mortgage, education, insurance, consumer brands, automotive, jobs and careers. DMS has achieved incredible year-over-year growth, which has earned recognition on the Inc. 5000 list in 2014, 2015, 2016 and 2017.

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