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Convenience Commerce

Instacart is the fastest growing online grocery delivery service

by Taylor Stanton - February 23, 2019

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This isn’t 1999, but it sure feels like it with the media buzz pertaining to the growth of grocery delivery services. These new merchants are no Webvan and Homegrocer, because this new delivery market is seeing web giants like Google competing directly with delivery startups. Even supermarkets are taking note of this developing trend. With Whole Foods and their decision to investing with Instacart, one of the fastest growing delivery services online, solidifying the startup as the supermarket’s exclusive delivery service. 

Data from Slice Intelligence shows that while, in 2015, grocery delivery services FreshDirect and Peapod*  did experience year-over-year growth between 12 and 35 percent in 2015, Instacart grew by a whopping 163 percent.

While Instacart grew at breakneck speeds last year, FreshDirect lead the online shopping aisle, but just barely. With 35 percent of the market share, FreshDirect was larger than Instacart by just three percent. 

When it comes to purchasing power FreshDirect’s shoppers spend the most. With buyers spending an average of $1,227 on their groceries, FreshDirect's customers outspend their closest counterparts by over $490 dollars. Interestingly the largest average number of annual orders for all four merchants is only an average of 10 orders annually. While this market is growing, shoppers aren’t using these services habitually throughout the year.

Instacart’s integrated while the rest are strong in a few cities

Growth aside, what else sets Instacart apart from their online competitors? The San Francisco based company attains their revenue across multiple top cities in the United States, while their competitors are established in only a few select metropolitan areas. Instacart sees 28 percent of their revenue coming from San Francisco and Oakland shoppers, and has an emerging presence in metropolitan areas, from Austin to New York. Google Shopping Express, to no one's surprise, also does very well in the Bay Area, with 58 percent of their shoppers spending in the silicon valley heartland. FreshDirect yields nearly 90 percent of their revenue from the New York City, and New Jersey metropolitan area while Peapod’s prominence is also in a few key metropolitan areas such as New York City, and Chicago.

A demographic dive into grocery delivery

Looking at demographics, the grocery delivery space is dominated by women. Female spending represents 65 percent of all revenue that was accrued by these four companies in 2015. Google’s a tad different. While 60 percent of there users are men, spending power is split down the line between the genders.

Editorial note: Peapod data does not include direct-billed grocery delivery, as there is not an e-receipt issued for these transactions.

About this data

With a panel of over 4 million online shoppers, Slice Intelligence gives the most detailed, and accurate digital commerce data available, and is reported daily.

Slice Intelligence is the only service to measure digital commerce directly from the consumer, across all retailers, at the item level, and over time. Our retailer-independent methodology precisely measures commerce as it happens. By extracting detailed information from hundreds of millions of aggregated and anonymized e-receipts, Slice can map the entire Purchase Graph, connecting each and every consumer to all their purchases.

Slice gets its data from e-receipts – not a browser, app or software installed by the end-user – so its measurement reflects comprehensive shopping behavior across multiple devices, over time which are key in an increasingly omnichannel retail world.