Stella Rising, the market research and branding company, recently looked at the escalation in the Amazon vs. Walmart grocery wars. As Rina Yashayeva, Stella Rising’s vice president of marketplace strategy, observed, Amazon launched in February its first Amazon Go Grocery, a full-scale, cashierless grocery store powered by discreet cameras and light sensors. Almost simultaneously, Walmart introduced a new e-commerce logistics hub for third-party sellers.
“As the two retailers engage in moves and countermoves, the winner will be the consumer,” Yashayeva remarked in a blog post. There are implications for everyone, and the time is now for brands to set and cement their strategies for the marketplace era.”The accompanying Stella Rising infographic focuses on Amazon, the current e-commerce leader in the U.S. grocery market, as new methods have emerged for food and beverage brands to expand on the platform in a very meaningful way.
The online grocery wars have taken more time than initially expected to ramp up; during the delay, massive investments have been made in shipping, logistics, and BOPIS services. While Walmart wins with groceries overall, Amazon has greater e-commerce market share (for now). As for how brands can capitalize on the momentum, Amazon Advertising expanded sponsored ads to Amazon Fresh last year, a major step for brands in that category seeking to gain exposure. In addition, brands in all categories should develop strong A+ content pages and curated brand stores.
Stella Rising identified six data points that food and beverage brands need to know about the e-commerce grocery market:
Amazon doubled its fulfillment of grocery orders in Q4 2019, following the Prime member delivery fee deletion
Online grocery sales were only about 4 percent of the market in 2019, but projections place that number increasing to over 10 percent by 2025
The current moment is pivotal in the online grocery wars as Amazon, Walmart, and others seek ownership of the $900B U.S. grocery industry
Only 15 percent of consumers enjoy grocery shopping in person, insinuating they are highly receptive to delivery
The percentage of online shoppers who purchase groceries online regularly doubled between 2018 (17 percent) and 2019 (37 percent)
Amazon Fresh, Whole Foods, Prime Now, or Pantry: Vendors and Sellers have myriad different ways of selling grocery on Amazon, depending on whether the products are refrigerated or shelf stable