Daily Insights

State of Affairs

By: Susruthi Vasudevan | Sep 19, 2019

Grocery e-commerce, which encompasses both food and beverages, is expected to hit $19.89 billion in 2019, up 18.2% from a year ago.

Amazon continues to own the lion’s share, but competition is intensifying as omnichannel retailers like Walmart and online grocery service providers like Instacart expand their digital capabilities and sophistication. The rising popularity of grocery e-commerce is reflected in changing consumer shopping behavior as well. In November 2018, the percentage of digital grocery shoppers who stated that they purchased groceries from Amazon* declined by five percentage points versus a year ago, while Walmart gained seven percentage points, resulting in overall shares of 36% and 33%, respectively. The top fifteen brands with the highest e-commerce performance scores are a diverse mix, hailing from different product categories and enterprises according to Gartner L2’s Digital IQ Index: Food US. This signals that brand size and product perishability don’t hinder the success of e-commerce optimization initiatives.

Leading brands like Campbell’s, McCormick and Jack Link’s are consistently strong across retailer platforms, especially on organic search visibility for nonbranded terms in their relevant categories. On the other hand, brands like Chobani, Talenti and Mission are doubling down on Amazon Fresh, Walmart Grocery and Target. Amazon Fresh mostly mirrors Amazon’s features, including Sponsored Product ads for CPG brands, which debuted in March 2019. Walmart is in the works to bring its online ad sales in-house, aiming to open up more advertising and promotional opportunities for brands. In the meantime, brands should leverage various components of Walmart Grocery’s PDPs.

Though they are less sophisticated, optimizing PDPs will help outperform competitors and private labels on search. Meanwhile, brands should also explore other merchandising touchpoints to further influence visibility