A relatively new online grocer leads with consumers.
The top eight online grocery retailers have twice share of wallet online than those in the bottom third of the rankings.
H-E-B narrowly edged out second-placed Amazon and third-placed Amazon Fresh as the top ranked U.S. e-commerce grocer, according to the inaugural dunnhumby E-commerce Retailer Preference Index (RPI). Walmart landed in the fourth spot and Sam’s Club rounded out the top five. Kroger, BJ’s, and Sprouts had the next highest scores in the RPI.
H-E-B captured the top ranking due to a number of factors, including having the highest level of emotional connection and online share of wallet among its customer base out of all the retailers studied. Although H-E-B were relatively new to offering online shopping compared to Amazon and Walmart, its customers migrated their spending online the most after the COVID-19 pandemic hit, increasing their grocery spending online by 27% resulting in H-E-B having the highest share of wallet online.
The eight top-performing retailers in this study all have well-established e-commerce capabilities, and most of them also have scale and size enabling them to have more funds to invest in e-commerce and greater operational efficiencies.
In addition, the top eight online grocers leverage their own digital assets, versus relying mostly on intermediaries, which dunnhumby says led to three out of five customers using these assets during their last online trip to any of the top eight.
Walmart, Amazon, and Amazon Fresh are the three top-ranked online grocers for owned digital asset usage. Sam’s Club, Amazon Fresh, and Aldi are the top three online grocers for ease and reliability.
Meanwhile, third-party online grocery delivery platforms Instacart, Shipt, and DoorDash have lower scores for the ease/reliability customer preference driver, higher bounce rates, and fewer pages/visits than other retailers in the study.
Omnichannel shoppers Defined as customers who purchase with a retailer across multiple channels, omnichannel shoppers can be up to 40% of all shoppers. dunnhumby data indicates 38% are between the ages of 25-54 and have at least two children. They buy online two times per month, with three out of every five visits to a retailer grocer occurring online.
On average, dunnhumby data reveals that omnichannel shoppers spend $531 per month across all the stores they shop and spend $131 per month - 25% of their share of wallet - with a single retailer. In contrast, brick-and-mortar-only shoppers are at least 50% of a retailer’s shopping base. Fifty-seven percent of them are 55 and up, and are either empty nesters, retirees or both. On average, brick-and-mortar-only shoppers spend $382 per month across all the stores they shop and spend $111 per month – 29% of their share of wallet – with a single retailer.
“H-E-B’s impressive performance proves that it’s possible to compete and win against Amazon when it comes to grocery e-commerce. Their success offers mid-size and regional retailers a roadmap on how to succeed online,” said Grant Steadman, president of North America for dunnhumby. “H-E-B’s e-commerce journey goes back to 2015, when they first started with curbside pick-up, and they have since built up a powerful online ecosystem. The combination of a simple and easy-to-use shopping experience with a fantastic emotional connection with customers shows how grocers can thrive in this multichannel landscape.”
Online grocery leads sector inflation While overall grocery inflation continues to rise year-over-year, recent data from Numerator indicates two specific channels are most responsible for the increase. Grocery prices were up 13.2% year-over-year, health & beauty prices were up 10.1% year-over-year, and household item prices were up 15.8% year-over-year for the four-week period ending May 15, 2022, according to inflation insights from Numerator. Within the grocery sector, the online channel (+21.5%) and dollar channel (+19.2%) have the highest year-over-year inflation rates.