Digital grocery has evolved from a pandemic-era convenience to a core retail channel. More than 90% of US consumers now shop for groceries both online and in-store, according to FMI and NielsenIQ. As the channel matures, the competitive battleground shifts from basic fulfillment to AI-powered personalization, retail media monetization, and seamless omnichannel experiences. This FAQ addresses the trends, players, and strategies shaping digital grocery in 2026.

What is digital grocery?

Digital grocery encompasses all online platforms consumers use to purchase groceries, including retailer websites, mobile apps, and third-party delivery services. The category operates through two primary models: delivery, where orders arrive at consumers' homes, and click-and-collect, where consumers buy online and pick up at a store (BOPIS), curbside, or locker.

Major retailers like Walmart, Amazon, Kroger, and Target offer first-party platforms with proprietary delivery and pickup services. Third-party intermediaries like Instacart, DoorDash, and Uber Eats partner with grocers who lack the infrastructure for their own fulfillment. Digital grocery now represents a necessity for consumer packaged goods (CPG) brands and retailers seeking to reach customers where they increasingly shop.

Who are the leading players in US digital grocery?

Walmart dominates US digital grocery, capturing 30.9% of grocery ecommerce sales in 2025, according to EMARKETER's forecast. Amazon holds second position at 23.6%, followed by Kroger at 9.1%.

Walmart's lead stems from three advantages:

• Physical footprint: 90% of the US population lives within 10 miles of a Walmart store, enabling same-day fulfillment to 93% of households.
• First-party data: Ownership of purchase data across channels supports precise targeting for retail media.
• Pickup infrastructure: Walmart pioneered curbside grocery and continues expanding in-store pickup capacity.

Among third-party players, Instacart leads delivery aggregators, though DoorDash and Uber continue expanding grocery partnerships and diversifying into non-food categories.

Why are consumers shifting to click-and-collect over delivery?

Click-and-collect (BOPIS and curbside pickup) now outpaces same-day home delivery, with 31% of shoppers using pickup compared to 29% using delivery, according to FMI and NielsenIQ. Three factors drive this shift:

• Cost sensitivity: Pickup avoids delivery fees, a priority as 78% of online grocery shoppers focus on spending awareness, per GWI.
• Control over timing: Consumers can retrieve orders on their schedule rather than waiting for delivery windows.
• In-store additions: Pickup trips allow shoppers to grab forgotten items, combining digital convenience with in-store browsing.

Retailers benefit from reduced last-mile costs while using pickup as a foot-traffic driver. In-store pickup preference is projected to reach 67% among click-and-collect buyers by 2027, surpassing curbside at 45.2%, per EMARKETER’s forecast.

How is AI changing digital grocery personalization?

AI adoption in grocery retail has accelerated rapidly: 92% of retailers are using technology, including AI, for personalized shopping and marketing experiences, according to FMI and NielsenIQ. Consumer receptivity is growing in parallel.

Key AI applications in digital grocery:

• Automated replenishment: 32.6% of shoppers are likely to let AI reorder staple items when supplies run low, per a July 2025 EMARKETER and Amazon Ads survey.
• Meal planning assistants: 45.8% would use an in-app chatbot that suggests meals and fills their cart.
• Personalized offers: 51% say it's important that their grocery store tailors promotions to them.

Nearly half (47.7%) of consumers expect their comfort with AI-powered grocery tools to increase over the next five years. Retailers like Ahold Delhaize are developing agentic AI solutions to enable advertisers to conduct media planning and activation with minimal friction.

What role does retail media play in digital grocery?

Grocery retail media networks (RMNs) monetize first-party shopper data by enabling CPG brands to target high-intent consumers across digital and physical touchpoints. Walmart's retail media business generated $4.82 billion in 2025 and will continue to grow by double digits through 2027, per EMARKETER’s forecast, reflecting the channel's profit potential.

Grocery RMNs offer advertisers:

• Closed-loop attribution: Connecting ad impressions directly to in-store and online purchases.
• Omnichannel targeting: Reaching shoppers on retailer apps, websites, and increasingly, in-store digital screens.
• First-party data access: Targeting based on actual purchase behavior rather than inferred interests.

In-store retail media is expanding rapidly. Albertsons is piloting in-store digital screen networks, while 47.8% of shoppers express interest in personalized digital signage in grocery aisles, per EMARKETER. RMNs are positioned as the connective tissue between physical and digital shopping.

How do Gen Z and millennials shop for groceries differently?

Younger consumers drive digital grocery adoption but differ in their discovery and purchase behaviors.

Gen Z prioritizes social proof and personalization. One-third of Gen Z and millennial consumers discover brands through social media ads, and Gen Zers are 70% more likely than average to use vlogs for product research, according to GWI. Social commerce is core to their journey: 55% of consumers now make direct purchases from social media or livestream platforms for groceries, per FMI and NielsenIQ. TikTok Shop processes nearly $6 billion in sales, with food ranking as the second-largest CPG category.

Millennials index highest on online grocery frequency: 57% more likely than average to order groceries weekly online, per GWI. They value exclusivity and app-based perks.

Baby Boomers represent emerging digital adopters, with US online grocery adoption up 34% since 2020. They prioritize security, detailed product descriptions, and next-day delivery options.

What challenges do CPG brands face in digital grocery?

Despite growth, digital grocery presents structural obstacles for brands:

• Private label competition: 50% of global consumers report purchasing more private-label products than ever before, according to NielsenIQ. In the US, 89% buy store brands to stretch budgets, per GWI. Retailer brands like Walmart's bettergoods and Target's Good & Gather expand category coverage.
• Platform fragmentation: Each retailer operates distinct ad formats, measurement standards, and buying interfaces. Managing campaigns across Walmart, Amazon, Kroger, and Instacart requires significant operational overhead.
• Limited transparency: Retailers control data and often restrict visibility into audience composition, incrementality, and cross-channel attribution.
• Rising costs: As CPG investment in grocery retail media grows, competition for premium placements intensifies, pushing up CPMs.

Consumers use an average of 3.9 cost-saving strategies, per NielsenIQ, including switching to value retailers and private label. This indicates sustained price sensitivity that may pressure branded margins.

How should CPG brands approach digital grocery strategy in 2026?

CPG brands should align digital grocery investment with four priorities:

1. Prioritize omnichannel presence: 86% of CPG dollar sales come from omnichannel shoppers, per NielsenIQ. Ensure consistent pricing, promotions, and product availability across retailer websites, apps, and stores.
2. Invest in personalization infrastructure: 60.1% of shoppers choose stores based on whether they carry products they know, per EMARKETER. Use RMN data partnerships to surface relevant offers through email, in-app messages, and in-store signage.
3. Test social and shoppable formats: 74.7% of consumers find shoppable ad features at least somewhat inspiring. Partner with creators for honest reviews (24.2% preference), cooking demos (17.7%), and discount codes (17.4%).
4. Measure incrementality rigorously: Push RMN partners for holdout testing and geo-experiments. Fragmented measurement standards make cross-retailer comparison difficult; establish internal benchmarks for true lift.

Value perception remains paramount: 55.8% of shoppers say low prices and clear value will remain their priority even as technology evolves.

We prepared this article with the assistance of generative AI tools and stand behind its accuracy, quality, and originality.

EMARKETER forecast data was current at publication and may have changed. EMARKETER clients have access to up-to-date forecast data. To explore EMARKETER solutions, click here.