Insider Intelligence delivers leading-edge research to clients in a variety of forms, including full-length reports and data visualizations to equip you with actionable takeaways for better business decisions.
In-depth analysis, benchmarks and shorter spotlights on digital trends.
Learn More
Interactive projections with 10k+ metrics on market trends, & consumer behavior.
Learn More
Proprietary data and over 3,000 third-party sources about the most important topics.
Learn More
Industry KPIs
Industry benchmarks for the most important KPIs in digital marketing, advertising, retail and ecommerce.
Learn More
Client-only email newsletters with analysis and takeaways from the daily news.
Learn More
Analyst Access Program
Exclusive time with the thought leaders who craft our research.
Learn More

About Insider Intelligence

Our goal at Insider Intelligence is to unlock digital opportunities for our clients with the world’s most trusted forecasts, analysis, and benchmarks. Spanning five core coverage areas and dozens of industries, our research on digital transformation is exhaustive.
Our Story
Learn more about our mission and how Insider Intelligence came to be.
Learn More
Rigorous proprietary data vetting strips biases and produces superior insights.
Learn More
Our People
Take a look into our corporate culture and view our open roles.
Join the Team
Contact Us
Speak to a member of our team to learn more about Insider Intelligence.
Contact Us
See our latest press releases, news articles or download our press kit.
Learn More
Advertising & Sponsorship Opportunities
Reach an engaged audience of decision-makers.
Learn More
Browse our upcoming and past events, recent podcasts, and other featured resources.
Learn More
Tune in to eMarketer's daily, weekly, and monthly podcasts.
Learn More

Amazon’s grocery business experiences growing pains

The news: Despite investing billions of dollars, Amazon’s foray into grocery has yielded mixed results thus far, per a CNBC report.

  • While its grocery ecommerce business remains strong, Amazon faces increased competition as retailers such as Walmart and Kroger ramp up their digital capabilities.
  • Amazon has also struggled to fully leverage its brick-and-mortar locations: While Amazon Fresh stores have resonated with consumers, Amazon Go convenience stores have been less successful.

More on this: Since Amazon’s $13.7 billion purchase of Whole Foods, the company has made grocery expansion a priority. However, the company has failed to build out a brick-and-mortar presence to rival existing grocery giants, despite its willingness to experiment with retail formats and the vast amounts of cash at its disposal.

  • Combined, and Whole Foods account for 2.4% of the grocery market, equivalent to Target’s market share, per data from Numerator. This is a relatively strong showing, considering that the number of Whole Foods and Amazon Fresh locations in North America comes to over 500, while Target has nearly 2,000 US locations. But Amazon’s grocery share is still significantly below that of market leader Walmart (18%).
  • In 2021, sales at Amazon’s physical stores were lower than in 2018, even as the company added more Whole Foods and Amazon Fresh locations.

How we got here: Amazon’s approach to retail seems to be to constantly debut new retail formats and see what sticks.

  • Upon launch, Amazon Go convenience stores seemed poised to revolutionize the shopping experience; however, their success has been hampered by a slow rollout. Four years after the first Amazon Go store opened in Seattle, there are only 24 locations, a far cry from the 3,000 the company once hoped to have open by 2021.
  • Physical retail continues to make up only a small part of Amazon’s overall revenues: In Q4 2021, the company’s physical stores generated $4.69 billion in sales, compared with $66.08 billion in sales for its online business, per Amazon’s earnings release.

A digital grocery power player: Digital is becoming an increasingly core component for grocers’ growth strategies. Since the pandemic, digital grocery adoption has risen significantly: We forecast grocery ecommerce sales will grow by 20.5% this year to reach $147.51 billion.

  • A January 2022 study from Acosta found that 68% of respondents currently shop online for groceries at least occasionally, due in part to pandemic-related concerns as well as financial considerations.

While Amazon’s strengths in ecommerce enabled it to quickly grab digital grocery market share, the company is second to Walmart when it comes to grocery ecommerce sales.

  • We expect Amazon’s share of grocery ecommerce to remain steady into 2023, even as Walmart, Kroger, Albertsons, and Target all grow their pieces of the pie.
  • As customers get increasingly savvy about shopping online for groceries, Amazon will have to improve its suite of digital grocery features to avoid losing shoppers. In our inaugural “US Digital Grocery Features Benchmark” report, Amazon Fresh ranks fifth and Whole Foods ninth.

The big takeaway: Amazon has made its mark on the grocery industry, but the company’s dearth of experience with brick-and-mortar has hampered its ability to dominate the market like it hoped it would.