An in-depth, peer-reviewed analysis on online grocery trends

By Mark Mahaney
Published April 17, 2020 | 2 min read

In the wake of COVID-19, consumer demand for online grocery shopping has triggered a major inflection point. Equity Analyst Mark Mahaney shares his insights on the trend and how Amazon (AMZN) may be positioned to benefit.

Required Conflicts Disclosures

Online grocery shopping is now a way of life for consumers.

Shelter-in-place directives have led to clear spikes in online searches, downloads and rankings for Amazon (AMZN), Instacart, Walmart, and others. Pre-COVID-19, well over half of consumers bought groceries online—and many are now willing to do so permanently.

To learn more, Equity Analyst Mark Mahaney prepared our 5th Annual User Survey, an in-depth, peer-reviewed analysis on online grocery trends. Our research points to both growing adoption and a major inflection point for online groceries, with AMZN the clear beneficiary.  

We’ve shared some key insights below. Please visit RBC Insight to access the full report.

Here is a snapshot of key themes from the survey:

1. As the virus rages, retailers ramp up to meet growing demand

The growing shift to online shopping is not new, but the percentage of consumers who bought groceries online jumped over 20% from last year due to the coronavirus.

Instacart drew the highest customer demand in its history, leading to 300,000 new shoppers. As a category, we found that grocery shopping is up 100% for the first three months of this year, with AMZN experiencing up to 50 times their typical increase in orders.

2. Ease and convenience lead to a major inflection point

Our research reveals that online grocery shopping could become a longer-term sustainable trend.

Most consumers who bought groceries at least once a week plan to continue because they like the ease and convenience, a 30% bump from five years ago. Our research also showed that “offline” shoppers who don’t purchase online plan to start over the next few months.

Beyond frequency, basket size and intent to spend are at all-time highs—which suggests that online shopping growth may accelerate even further over the next few years.

3. Amazon is still the top destination for online shoppers

Just as it was two years ago, AMZN continues to be a top destination for online shoppers; our research revealed that consumers prefer the online merchant over its competitors, followed by Walmart.

That popularity and share of market should drive positive three-year growth expectations in the online grocery segment as well. Over the next three years, we expect its Gross Merchandise Volume (GMV) to grow 24%, accounting for nearly 11% of total GMV and $77B in grocery revenue.

AMZN is currently 1/10th the size of Walmart in online grocery sales. But with its strong mobile positioning, management team, and infrastructure advantages, we believe it could grow its market share and remain very competitive with Walmart over the next three years.

The outlook: Amazon thrives in the online grocery segment

COVID-19 has ignited an inflection point in online grocery shopping—a trend that’s clearly poised to continue for the long term.

If AMZN can optimize the customer experience – a very challenging proposition in this environment – it can dramatically benefit, with groceries becoming a larger portion of its revenue in a few years. The most significant risks to this growth may be sales taxes and keen competition from online retailers.

Mark S.F. Mahaney authored “Put AMZN On Your Grocery List.” For more information about the full report, please contact your RBC sales representative.

For Required Conflicts Disclosures, click here. These disclosures are also available by sending a written request to RBC Capital Markets Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South Tower, Toronto, Ontario M5J 2W7 or sending an email to

Mark Mahaney

Mark Mahaney
Managing Director, Internet Research Analyst