Who’s the most innovative online grocery company? That depends on how you define “innovative”...does that mean customers can order online and pick up groceries or have them delivered? Or having a modern, user-friendly, mobile-responsive design? This analysis defines such criteria and reveals the winners.
Who’s in the running?
This study starts by looking at the top 50 grocery retailers in North America (from Supermarket News’ The 2016 Top 75 U.S. and Canadian Food Retailers & Wholesalers), excluding wholesalers, convenience stores, pharmacies and dollar stores.
Tables Stakes: Digital Circulars
Beyond static brochure-ware, the minimum presence grocery retailers throw online are:
  • flyers/circulars
  • coupons
  • shopping lists
  • recipes
  • loyalty point management
One might think that a dedicated mobile app is a sign of innovation, but many large grocery retailers have wrapped up the above functionality into apps, so it’s not a unique differentiator.
Separating the cream: Form & Function
Innovative grocers start to separate themselves from the pack through either form (as in modern, user-friendly, mobile-responsive design) or function, most notably online ordering.
Offering customers the ability to order groceries online and have them delivered, the elusive holy grail ever since the dot-com fall of Webvan, still proves challenging to the handful of grocery retailers that are trying to make the economics work. As a result, two alternatives have risen in popularity:
  1. 3rd party delivery companies like Instacart and Shipt.  Some grocery retailers have formal arrangements with these delivery companies, some don’t. Either way, these delivery companies are providing the innovation, not grocery retailers.
  2. Order online and pick-up at the store - This seems to be where many grocery retailers are settling for the moment.
“Smart” eCommerce: Recommendations
Taking a cue from eCommerce innovator Amazon, a handful of grocery retailers are trying to make the shopping experience “smart”, typically in the form of recommendations based on the product being viewed. The algorithms are usually a function of products in the same category, products also viewed, or products also purchased; however looking at the actual implementations, many recommendations are not that “smart” or relevant. Only a handful offer truly complementary product recommendations, like suggesting salsa if you’re looking at chips (Hy-Vee), and one (Sobeys) goes one step further and offers recipes recommendations, for example spinach dip if you’re looking at sour cream.
From Ingredients To Meals
As mentioned earlier, online recipes are a common offering. But some grocery retailers have made more serious efforts to be top of mind at the recipe-decision stage by making their online presence recipe-centric, and then translate the ingredients for these recipes into shopping lists, or go one step further by allowing customers to shop for ingredients from recipes. The most innovative grocery retailers have caught onto demand surfaced by companies like Blue Apron for meal kits i.e. groceries bundled with recipes.
The Disruptors
Before getting to the top innovators amongst traditional grocery retailers, it’s worth noting some outsiders with new business models tapping into different ways consumers can get their groceries.
    • FreshDirect - Even though they’ve been around for a while, FreshDirect has maintained its innovative edge as an online-only grocery delivery company, sporting features like product recommendations, shoppable recipes, meal kits, and on-demand delivery.
    • Good Eggs - Their recent scaling back of operations raises questions about their business model, however this quasi peer-to-peer market is certainly shaking up the sleepy farmers market industry.
    • Instacart, Shipt - These delivery companies clearly offer a service that some customers value, forcing grocery retailers to beat them or join them.
    • Blue Apron - Meal kits may not be shrinking retailer grocery cart baskets noticeably today, however considering the fact that grocery retailers are shifting towards offering solutions inspired by recipes, one could argue that meal kits are a glimpse of the future.
    • Amazon Fresh, Walmart Grocery -  Online groceries for these eCommerce behemoths are still only in the pilot phase, however they are ones to watch if volume picks up.
The Innovators
The top online grocery innovators are grouped according to their unique ability to achieve the criteria spelled out above.
(For a complete matrix of grocery companies and their online offerings, contactsteven@handpick.com)
Tier 1: Delivery + Modern Design
#1: Hy-Vee - Their product recommendations actually make sense, like suggesting dried cranberries to complement raw almonds.
Tier 2: Pick-up + Modern Design
#2: Loblaws - Their recipe-centric site is beautifully chock full of food porn, although ironically it doesn’t allow you to add recipe ingredients to a shopping list or cart. They’ve also dabbled in a meal kit in partnership with Knorr.
#3: Giant Eagle - Their in-house site is up-to-date, but some stores are still on their legacy, 3rd party platform.
#4: Meijer - Their straightforward site includes product recommendations, but no recipes.
Tier 3: Recipe-Centric
#5: Whole Foods Market - The most inspirational of all sites. Want delivery? Partner Instacart will take care of that.
#6: Sobeys - Their site could pass for a recipe-based social media site including video tips.
#7: H-E-B - Perhaps not as inspirational as other recipe-centric sites, but they do have a leg up on others in terms of shipping non-perishables across the country.
#8: Metro - A healthy mix of recipes and grocery planning.
Honorable Mention: Modern Design
  • Aldi
  • Sprouts
  • Publix
  • Target
  • Ingles
  • Trader Joe’s
  • BI-LO
Honorable Mention: Delivery
  • Ahold (Peapod + Giant Food / ShopRite).
  • Price Chopper
  • Safeway / Albertsons
  • ShopRite
Honorable Mention: Pick-up
  • Raley's
  • Delhaize (Hannaford)
  • Kroger
  • Weis Markets