Nearly a year since the largest disruption of the grocery industry to date, Amazon is still refining its integration of Whole Foods Market, though its efforts thus far seem to be paying off.
The global e-commerce giant has captured 18% of U.S. online grocery sales since 2017, according to a new report by One Click Retail, marking the largest share of any single retailer and doubling that of its closest competitor, Walmart Inc.
While consumers have been hesitant to purchase fresh products online due to varying preferences for items such as meat and produce, the convenience of Amazon’s Prime Pantry, which offers Prime members expedient delivery of packaged groceries and household items, has served as an approachable introduction to online grocery shopping.
In the second quarter of 2018, Amazon raked in $650 million in online grocery sales, excluding AmazonFresh, per One Click Retail’s Amazon Grocery Q2 Update, with cold beverages ranking as its top-performing category, followed by coffee, snack foods, breakfast foods and baking, respectively.
The study also revealed that Amazon’s online grocery sales are continuing to grow 40% year over year, with nearly every category drawing new grocery shoppers to Amazon, which can likely be attributed to its incorporation of Whole Foods.
In addition to the launch of its Prime member savings program at Whole Foods Market and Whole Foods Market 365 stores this year, Amazon for the first time featured Whole Foods in its fourth annual Prime Day sale as an added incentive for Whole Foods shoppers to become Prime members. The promotion offered Prime members a $10 credit toward the 36-hour event when they spent $10 in Whole Foods stores from July 11 to 17, and included discounts on select products such as organic strawberries, which was the best-selling deal, according to a statement from Amazon.
Amazon has also been successful with Whole Foods’ private brand, 365 Everyday Value, which now marks the company’s largest private grocery label, available via Prime Pantry.
“With Prime's growing list of value-added ‘members only’ features, Amazon is investing in what is arguably the country's largest customer loyalty program,” One Click Retail said in its report.
Amazon’s Prime Day saw more than 1 million deals worldwide offered exclusively to Prime members, with this year’s sales surpassing Cyber Monday, Black Friday and the previous Prime Day event, according to Amazon.
In an attempt to compete with the sensational sale, which analysts estimated would generate about $3.4 billion in sales, other retailers launched their own savings events including Target, which featured free two-day shipping on orders over $35 and free shipping and a 5% discount for REDcard holders, and Kroger, which offered to $100 in digital coupons for organic items.