Grocery shopping was a big deal even before the pandemic. It took a lot of time to do and had to be squeezed in among work, child-care, cooking, and the boring-but-necessary household tasks. If any part of our lives needed to be disrupted, it was this.
Services like Amazon Fresh gradually rose in prominence, but online grocery delivery never hit it big until recently when “convenience” stopped being its only major benefit. Now, grocery delivery services are a crucial part of many customers’ lives and have changed the way groceries do business.
Before we get ahead of ourselves, let’s define what online grocery delivery actually is.
What is online grocery delivery?
An online grocer is a retailer that sells grocery products online. This could be the webstore of an existing brick-and-mortar store or an e-commerce vendor that offers grocery items.
Many of these online grocers offer to deliver the purchased products to a customer’s home for a small fee, although some deliver the items for free if the customer purchased a certain amount.
There are also third-party online grocery delivery services that offer to pick up the ordered items from the retailer themselves. This allows consumers to purchase items from retailers that can’t provide their own delivery service and helps businesses service customers who want alternative means of shopping.
Does online grocery delivery work?
Online groceries and their associated delivery services have long passed the point of being a novelty, and are becoming increasingly common among consumers.
According to eMarketer, online grocery sales in the US grew by nearly 53% in 2020, jumping from $58 billion in 2019 to over $89 billion the following year.
According to the same report, 90% of users who purchased from online groceries had their items delivered directly to their residence or office, which outperformed all other pickup options by an overwhelming margin, such as in-store pickup (22%), curbside pickup (22%) and delivery to a locker (e.g. Amazon Hub–3%).
We can attribute most of this progress to the pandemic and the increased need for safety and convenience, but that doesn’t tell the entire story. While online grocery has been around for a while, it has usually taken a backseat to traditional grocery store operations. Now that the situation is reversed, online grocery delivery services are getting the resources they need to effectively scale and sustain their operations.
“New CPG brands are entering markets dominated by big-box retailers and selling similar products in a way that addresses the exact pain points of their niche target market. They’ve given a fresh take on an old product and can project themselves as something new and worth trying.”
— Ben Whitrock, Senior Growth Media Manager at Tinuiti
Top online grocery delivery services
As of this writing, the top online grocery delivery services (in no particular order) are:
Availability: Over 2,000 cities
Fee: Free with order of $35 or more
Membership: Amazon Prime membership required
Amazon Fresh has partnered with Whole Foods to provide fresh groceries to Amazon Prime members all over the United States. Amazon’s grocery delivery service retains its commitment to fast turnaround times, and can deliver purchases to your door in as little as an hour.
While the service is only available in major urban centers, Amazon is gradually increasing its coverage to more cities every month. Amazon Prime membership is required, but the service is free if you buy more than $35 worth of food.
Availability: 1,600 cities
Fee: $7.95 to $9.95, free with Walmart Delivery Unlimited
Membership: Not required
Walmart Grocery is Walmart’s take on online grocery, and while it can’t match the delivery speed of Amazon Fresh, Walmart’s advantage lies in its sheer range of products. Anything that is on the shelf of a Walmart can be delivered with your grocery items–electronics, toys, and household appliances.
Walmart has held its own by improving on its own in-store pick-up model (Walmart Grocery Pickup) by leveraging its massive network of over 4,700 physical stores that can reach 90% of the US population.
Availability: 40 states
- $3.99 to $7.99 delivery fee for orders under $35. Higher if one-hour delivery.
- Curbside fee from $0 to $4.99
- 5% service fee
- Peak hour pricing
Membership: Not required for a basic membership. Instacart Express at $99/year or $9.99/mo
The first third-party delivery service on this list, Instacart uses local shoppers to pick up orders from your grocer and deliver them to your door. You can purchase from any store on the Instacart app, from Costco to Trader Joe’s–and even purchase from multiple stores in one go. The app provides you with live updates as the shopper gathers your purchases, and you can pick substitute products in case your favorites are out of stock.
You don’t need a membership to use the app, but it will be more costly. The Instacart Express membership drastically reduces the fees of your Instacart orders and is worth signing up for if you plan to do most of your grocery shopping online.
“Instacart’s marketplace is becoming an enormous opportunity for brands that can get on the platform early. High conversion rates, average order values, repeat purchases, and lower CPCs are all positive signals for brands, in addition to reaching shopper households all across the US.”
“Customers are also moving rapidly from thinking just perishable staples to adding shelf-stables and other CPG products like cosmetics, health, and of course, alcohol. If you are in-store at a participating retailer, then an Instacart ads program should be part of your media strategy.”
— Elizabeth Marsten, Senior Director of Strategic Marketplace Services
- New York
- New Jersey
- Washington, DC
Fee: $5.99 to $15.99
Membership: Not required for basic membership. DeliveryPass available for $129/year or $79 for 6 months
FreshDirect has a much smaller footprint than other options on this list, but the quality of the organic produce and meat products available rival even that of Amazon Fresh. You can order both groceries and prepared meals, and certain regions even allow you to purchase alcohol.
Availability: 900 Safeway locations
Fee: $10 and up
Membership: Not required
Safeway is a pretty popular brand for those people living on the West Coast, and loyal shoppers will be thrilled at their home delivery service. Customers who purchase on their online store can have groceries delivered to their home for a $10 delivery fee. They offer free delivery for orders that are $150 and up, but that requires some major shopping to achieve.
Deliveries run 7 days a week, from 8 A.M. to 10 P.M. local time. It’s a more limited delivery window than other apps on this list, but it’s still well within reasonable hours for most customers.
Fee: Included with membership
Membership: $59/year or $9.95/mo
Thrive Market is an online-only grocery retailer that specializes in healthy and organic products. This includes item categories like supplements, beauty and home living. They lean heavily on sustainability and promote their carbon-neutral shipping practices, recyclable/compostable packaging, and zero-waste warehouses.
An annual Thrive membership offers perks you won’t find anywhere else, such as free gifts and product samples. Thrive will even sponsor a free membership for a family in need for every new annual membership they sign.
Fee: $3 per unit surcharge for items under $75, free shipping for orders above $75
Membership: Costco membership required
Yes, the shopping giant Costco has also gotten into the grocery delivery game, with a reach almost as large as Walmart’s. Costco members will be able to take advantage of Costco’s bulk products, but the selection is much more limited than what you would find on Walmart Grocery and Amazon Fresh.
Shoppers are only allowed to purchase non-perishable food and household items from the online store, and can only choose from items marked with the Costco Grocery tag. Deliveries can also take quite a bit longer than other similar services, with deliveries taking anywhere from 2 to 10 business days.
Fee: $7 delivery fee on orders below $49
Membership: Optional $49/year
Boxed’s mostly sells and ships bulk products to consumers and offices, but also sells perishable goods and groceries via its Boxed Express service. You can pick from any item on its extensive Express Grocery menu, from produce to dairy to frozen foods, which are hand-picked from local stores and delivered by designated Boxed Shoppers at a time you arrange in advance.
Not all locations are covered by Boxed Express, but you can easily check by entering your zip code into the Boxed Express website or app.
To learn more, check out The 7 Biggest Online Grocery Shopping Trends & Tactics for Brands.