Online Grocery Apps Are Thriving During the COVID-19 Crisis. Are They Here to Stay?

Taylor Soper, GeekWire
Taylor Soper is GeekWire's managing editor, responsible for coordinating the newsroom, planning coverage, and editing stories. A native of Portland, Ore., and graduate of the University of Washington, he was previously a GeekWire staff reporter, covering beats including startups and sports technology. Follow him @taylor_soper and email taylor@geekwire.com.
Online Grocery Apps Are Thriving During the COVID-19 Crisis. Are They Here to Stay?
Photo from Flickr Creative Commons

More people are ordering groceries online due to the novel coronavirus outbreak, leading to a permanent consumer purchasing shift — and a giant revenue boost for Amazon.

That's according to an analysis from RBC Capital Markets, which just ran its fifth annual user survey on online grocery trends. It concluded that Amazon's online grocery arm could produce $70 billion in gross merchandise volume by 2023 — more than 3X from 2019 — becoming a material portion of its total revenue.


"We view Amazon as one of the largest structural beneficiaries of this accelerated secular shift to online grocery shopping, along with Walmart and Instacart," wrote RBC analyst Mark Mahaney in the report.

The 1,500-person survey, conducted over the past two weeks, found that 42% of respondents purchase groceries online at least once a week, up from 22% in 2018. Amazon is the most frequent destination for shoppers, with 60% using the tech giant to buy groceries online, compared to 47% for Walmart.

RBC Chart

Mahaney said the pandemic has "created an inflection point for online grocery shopping." One-third of respondents said they made their first online grocery purchase in the past month. More than half of online grocery shoppers surveyed said COVID-19 is "leading them to permanently boost their willingness to buy groceries online." And of the people who don't buy groceries online, 41% (up from 19% in 2018) said they would do so in the next six months.

"We believe that online grocery shopping may now be coming a habitual practice among shoppers," Mahaney wrote.

RBC also found that online grocery purchase frequency, basket size, spend, and intent to spend reached all-time highs.

The report cited increased recent Google searches for "online grocery," surging app downloads for Amazon's Prime Now and other delivery services, and an Adobe study that cited 100% growth in daily sales for U.S. online grocery shopping last month as social distancing orders keep people inside their homes.

RBC also spoke with Instacart president Nilam Ganenthiran, who said customer demand over the last few weeks has hit record levels and is up 300% year-over-year. The company said it will hire 300,000 shoppers over the next three months to keep up. This week it added new features to open up more delivery windows.

The New York Times reported that orders for Amazon groceries have been as much as 50 times higher than normal. The company has struggled to fulfill orders, with some customers reporting extended delays or no open delivery windows for weeks.

Instacart is one of many companies investing heavily in grocery delivery.

Flickr

"This, to us, implies that there is demand for online grocery shopping, and service providers are struggling to meet this customer need," Mahaney wrote. "Could this be a short-term issue? Probably. That said, we believe COVID-19 has brought a dramatic increase in awareness for the value, ease and convenience of online grocery shopping that could last for a long time."

The spike in online grocery purchasing could also help Amazon boost its Prime membership base. Amazon requires a $119/year Prime membership to access its 2-hour Prime Now delivery service and Amazon Fresh.

Nearly 75% of the survey respondents said they were Prime members, up from 59% last year. RBC estimates that there are about 90 million U.S. Prime subscribers, of Amazon's reported 150 million members worldwide (Amazon does not disclose country-specific numbers).

This past October, Amazon made grocery delivery a built-in benefit of Prime membership — no longer charging an extra $15 per month, or $180 per year, for Amazon Fresh delivery on top of the $119 annual Prime fee.

"I've been working in grocery delivery a long time, and I think this offering is truly a game-changer," Stephenie Landry, Amazon's vice president of grocery delivery, said in an interview with GeekWire in October. She predicted that free Amazon Fresh grocery delivery would become "one of the most loved benefits of Prime."

Amazon's online grocery arm also includes its AmazonFresh Pickup service. The company also offers BOPIS (Buy Online PIckup in Store) at Whole Foods, which it acquired for $13.7 billion three years ago.

Amazon offers discounts to Prime members when they shop at Whole Foods, and has integrated Whole Foods ordering into its Alexa voice assistant.

Groceries are an estimated $678 billion U.S. market that is increasingly going digital. Research firm eMarketer estimates that U.S. food and beverage e-commerce sales will grow 23.4 percent to more than $32 billion this year, making it "both the fastest-growing and least penetrated ecommerce category." Those projections came before the COVID-19 crisis.

"Aside from the many brick-and-mortar retailers watching foot traffic and sales drop to near zero, the most profound shift in consumer behavior is happening in grocery ecommerce—and this shift is likely to have one of the longest-lasting consequences," eMarketer wrote.

Amazon has been trying to solve the economic problem of grocery delivery for more than a decade, dating back to the 2007 launch of Amazon Fresh as a pilot in Seattle.

The infrastructure and other costs associated with delivery cut into the already thin profit margins of the grocery business. But the expanding consumer appetite for online grocery ordering appears to be changing things.

"Years ago people didn't think that consumers would buy things like clothing online," Amazon's Landry said in October. "And now we know that consumers are doing it in great numbers. We believe we're at a similar turning point for fresh groceries and we're ready to make a fresh grocery delivery a great new part of Prime."

Also aiding Amazon's grocery delivery efforts is the company's huge investment in its delivery network that is enabling 1-day delivery promises for Prime members.

Instacart, Walmart, Target, Kroger, and others are also investing heavily in online grocery. Walmart, which brought in more than $250 billion in revenue for fiscal year 2020, said in September it would offer grocery pickup from 3,100 stores and grocery delivery from 1,600 stores by the end of 2019.

Walmart's expansion into online ordering, and Amazon's expansion into brick-and-mortar retail, show how the retail industry is increasingly becoming one large market, blending online and in-person sales.

RBC's Mahaney said Amazon's grocery sales could reach around one-third the size of Walmart by 2023.

"Given that Amazon has over the past 25 years reached closed to parity with Walmart in terms of non-grocery global retail sales and online adoption is dramatically greater today than it was 5, 10, 20, 25 years ago, we believe our one-third ramp is gut-check reasonable," the report noted.

This story first appeared on GeekWire

⚠️📲🌩️ Your Digital Lifeline: Top Tech Apps for Natural Disasters

Living in LA means being ready for anything—quakes, wildfires, crazy weather, you name it. Luckily, there’s a suite of tech apps designed to keep you informed, connected, and safe when disaster strikes. From real-time alerts to staying in touch with loved ones, these apps have you covered. Here’s the ultimate list to help you handle whatever chaos comes your way in LA County.

Get Real-Time Alerts

Image Source: MyRadar

FEMA App
  • What it does: Provides real-time alerts from the National Weather Service, along with shelter and disaster recovery info.
  • Key features: Weather alerts, shelter locator, and preparedness resources.
  • Available on:iOS | Android
MyRadar Weather Radar
  • What it does: Offers real-time, animated radar for tracking severe weather and storms.
  • Key features: Live radar, storm tracking, and severe weather alerts.
  • Available on:iOS | Android
Clime: NOAA Weather Radar
  • What it does: Delivers real-time radar and weather updates, with wildfire and flood tracking.
  • Key features: Customizable weather alerts, disaster tracking.
  • Available on:iOS | Android
American Red Cross Emergency App
  • What it does: Provides real-time alerts for over 35 types of emergencies, plus disaster preparedness tips.
  • Key features: Alerts, safety check-ins, and emergency tips.
  • Available on:iOS | Android
My Earthquake Alerts & Feed
  • What it does: Sends real-time earthquake alerts, with maps and detailed data.
  • Key features: Earthquake alerts, customizable notifications, detailed maps.
  • Available on:iOS | Android
Citizen
  • What it does: Delivers real-time alerts for emergencies, including natural disasters and crime near your location.
  • Key features: Safety alerts, live incident reports, and community updates.
  • Available on:iOS | Android

Stay Connected with Loved Ones

Image Source: Life360

While social media apps like Facebook and X provide real-time updates, additional tools can help with communication and location sharing, ensuring you stay connected and safe.

Nextdoor
  • What it does: Connects neighbors with real-time local updates on emergencies and community events.
  • Key features: Neighborhood alerts, local info, resource sharing.
  • Available on:iOS | Android
WhatsApp
  • What it does: Enables secure messaging, location sharing, and video/voice calls with family and friends.
  • Key features: End-to-end encryption, location sharing, voice/video calls.
  • Available on:iOS | Android
Zello Walkie Talkie
  • What it does: Turns your phone into a push-to-talk walkie-talkie for communication in low-signal areas.
  • Key features: Push-to-talk, works over Wi-Fi/data, group communication.
  • Available on:iOS | Android
Glympse – Share Your Location
  • What it does: Lets users share real-time locations with family and friends without needing an account.
  • Key features: Location sharing, ETA updates, private tracking.
  • Available on:iOS | Android
Life360
  • What it does: Tracks real-time location of family members and provides emergency SOS alerts.
  • Key features: Family location tracking, emergency alerts, crash detection.
  • Available on:iOS | Android

Stay Mobile

Image Source: PlugShare

For navigating road closures and traffic during disasters, Google Maps and Waze are essential tools that offer real-time updates and alternate routes. Along with these go-to options, there are additional apps that can help you stay mobile when it matters most.

GasBuddy
  • What it does: Locates nearby gas stations and provides real-time updates on fuel availability and prices.
  • Key features: Gas station locator, fuel prices, availability checks.
  • Available on:iOS | Android
PlugShare
  • What it does: Provides a comprehensive map of public EV charging stations worldwide. It offers real-time availability, pricing, user reviews, and photos of charging stations, helping you find the best nearby options.
  • Key features: Real-time station availability, detailed station info, user reviews, and trip planning.
  • Available on:iOS | Android

Traditional Preparedness Tips

In addition to these tech apps, it’s crucial to prepare for natural disasters with traditional methods:

  • Build a disaster kit: Gather essential supplies like food, water, first aid supplies, and a flashlight.
  • Develop an evacuation plan: Determine where you will go and how you will get there in case of an emergency.
  • Keep emergency contacts handy: Make a list of important phone numbers.

Maximize Battery Life and Data During Emergencies

During disasters, power outages and increased network traffic can affect your device's battery life and data usage. Consider the following:

  • Keep your devices charged: Use portable or solar-powered chargers to extend battery life.
  • Conserve data: Use Wi-Fi hotspots when available to avoid excessive data charges.

These apps are your go-to tools for staying informed, connected, and ready for anything in Los Angeles County. Whether you need real-time alerts, navigation assistance, or ways to keep in touch with loved ones, having these apps on hand can make all the difference when it matters most.

Download the dot.LA App

Luxurious Second Home Ownership without the Headache: How Pacaso is Changing the Landscape of Real Estate

🔦 Spotlight

Pacaso addresses the pain points of second home ownership, offering a luxurious, flexible, and financially sound alternative to traditional second homes and ultra-luxury hotels. Co-founded in 2020 by entrepreneur Austin Allison and former Zillow executive and prominent LA tech figure Spencer Rascoff, Pacaso, an unicorn startup, has redefined vacation home ownership with its unique co-ownership model. Rascoff's contributions to the LA tech scene extend beyond real estate; he also founded 75 & Sunny, an LA-based startup studio and venture fund, and co-founded dot.LA, an LA tech news and events company.

LA residents adore Pacaso for its lush vacation destinations that also make for smart investments. Pacaso offers everything from serene weekend getaways in Aspen to sophisticated escapes in Paris. Each residence, valued between $200k to over $2M for 1/8th, boasts meticulous design, high-end furnishings, and premium amenities. Unlike traditional second home ownership, which involves high costs, maintenance, and underutilization, or ultra-luxury hotels, which lack the personal touch and investment potential, Pacaso's co-ownership model offers a superior solution. Co-owners enjoy the benefits of a high-end vacation home without the full financial burden and hassle of sole ownership, making it a smarter and more flexible choice for discerning buyers.


Image Source: Pacaso

Cabo, Mexico

$822,000 (1/8th ownership)

5 bds. l 5 ba. l 4,969 sq ft

View Here


Image Source: Pacaso

Paris, France

$600,000 (1/8th ownership)

2 bds. l 2.5 ba. l 1,410 sq ft

View Here


Image Source: Pacaso

Malibu, California

$750,000 (1/8th ownership)

3 bds. l 3 ba. l 1,880 sq ft

View Here


Image Source: Pacaso

Park City, Utah

$755,000 (1/8th ownership)

4 bds. l 4.5 ba. l 2,584 sq ft

View Here

Head to Pacaso to learn more about its innovative co-ownership model that addresses the common challenges of second home ownership!


🤝 Venture Deals

LA Companies

  • Oak Essentials, the natural skincare brand founded by Jenni Kayne, has raised an undisclosed amount in Series A Funding from Silas Capital and Unilever Ventures. This investment will drive the brand’s expansion, focusing on product development, boosting marketing efforts, and expanding distribution channels. - learn more
  • Playhouse MD, an upcoming children’s healthcare platform that incorporates play to enhance health outcomes, has raised $4M in funding, according to a recent SEC filing. - learn more
  • FluidLogic, a high-performance hydration system provider, raised $15M in a Series A Extension led by Solyco Capital to support product development and innovation for adventure sports and outdoor endurance categories, with consumer products launching in early 2025. - learn more
  • Reflect Orbital, which uses in-space reflectors to direct sunlight to solar farms and large-scale lighting applications after sunset, has raised $6.5M in seed funding led by Sequoia Capital. The funding will help the company develop production vehicles and expand its team as it builds space-based energy infrastructure. - learn more

LA Venture Funds
  • Smash Capital led a €20M Series B round into Vilnius-based Ovoko, an e-commerce platform for buying and selling used car parts across Europe, marking Smash Capital's first investment in Lithuania. The funds will support Ovoko's product development, market expansion, and team growth as it aims to dominate the European market for second-hand automotive components. - learn more
  • M13 led a $9M Series A Funding Round for Zenlytic, the world’s first self-serve business intelligence platform. - learn more



LA Exits

  • Continuum Global Solutions’ healthcare vertical has been acquired by Everise, a customer service management company, enhancing Everise’s capabilities in pharmacy benefit management and expanding its growth prospects in the healthcare sector. - learn more
  • Radical Semiconductor, a company specializing in processing-in-memory technology, has been acquired by BTQ Technologies, a leader in post-quantum cryptography. This acquisition strengthens BTQ’s ability to secure data in the post-quantum era by integrating Radical Semiconductor's advanced technology portfolio. - learn more

Download the dot.LA App

🎧The Essential Podcast Playlist for Entrepreneurs, Founders, Tech Pros, and VCs

Podcasts offer a front-row seat into the minds of the most successful entrepreneurs, VCs, and industry thought leaders. Whether you're scaling your startup, raising capital, or simply staying ahead of the game, these shows deliver invaluable insights, actionable lessons, and fresh inspiration. And let’s be honest, if you’re stuck in LA traffic (again), what better way to kill time than by learning from the best? Here’s a roundup of our top podcasts for entrepreneurs, founders, tech professionals, and VCs, complete with why they’re a must-listen.

Image Source: Apple Podcasts

The a16z Podcast

  • What it discusses: Covering a broad spectrum of topics like AI, blockchain, healthcare, and fintech, the podcast features interviews with founders, VCs, and tech leaders shaping the future.
  • Why you should listen: Get access to cutting-edge insights from one of the world’s most influential VC firms, keeping you ahead of emerging trends.
  • Why it’s great for entrepreneurs, founders, and VCs: This podcast brings cutting-edge insights from one of the top VC firms. Entrepreneurs will learn about emerging technologies, while VCs can stay ahead of investment trends shaping the future of tech.

Listen on: Spotify |Apple Podcasts



Image Source: Apple Podcasts

Acquired Podcast

  • What it discusses: Acquired breaks down the stories behind major tech acquisitions, IPOs, and exits, dissecting the strategies and market dynamics involved.
  • Why you should listen: Gain deep insights into how tech giants build and sell, making it essential for anyone aiming to understand successful exits.
  • Why it’s great for entrepreneurs, founders, and VCs: Perfect for founders looking to scale or position themselves for acquisition. VCs will benefit from the deep dives into the playbooks of successful exits, offering valuable lessons on company growth and market positioning.

Listen on: Spotify |Apple Podcasts



Image Source: Apple Podcasts

The All-In Podcast

  • What it discusses: From venture capital and tech trends to politics and economics, this podcast delivers unfiltered, candid commentary from high-profile industry insiders.
  • Why you should listen: It’s a no-holds-barred discussion on major issues affecting the tech industry, providing you with insider insights into the conversations that shape Silicon Valley.
  • Why it’s great for entrepreneurs, founders, and VCs: The candid, unfiltered conversations give listeners a peek into the decision-making processes of some of the biggest names in tech and VC. Entrepreneurs can gain valuable market insights, while investors will appreciate the high-level strategy discussions.

Listen on:Spotify | Apple Podcasts



Image Source: Apple Podcasts

BG2 Podcast

  • What it discusses: BG2 takes you through macroeconomic trends, the tech market, venture capital insights, and cutting-edge technologies like AI. It’s a high-level conversation on tech investing.
  • Why you should listen: Brad and Bill’s deep experience in tech investing, combined with their straightforward, no-nonsense style, makes this a must-listen for tech insiders.
  • Why it’s great for entrepreneurs, founders, and VCs: Get insider-level insights into the macro trends driving tech investments. Founders will learn how to navigate these trends, while VCs can better understand the shifting forces in the venture world.

Listen on: Spotify | Apple Podcasts



Image Source: Apple Podcasts

Crucible Moments Podcast

  • What it discusses: The podcast dives into the pivotal, career-defining moments of top leaders and entrepreneurs. Guests share personal stories of resilience, growth, and how they overcame adversity.
  • Why you should listen: It’s packed with inspirational stories of grit and perseverance, offering lessons that apply to both life and business.
  • Why it’s great for entrepreneurs, founders, and VCs: The podcast’s focus on personal and professional resilience makes it especially valuable for entrepreneurs who need inspiration during tough times, and VCs who want to understand how founders overcome adversity.

Listen on: Spotify | Apple Podcasts



Image Source: Apple Podcasts

Grit Podcast

  • What it discusses: In-depth interviews with founders, executives, and leaders who share stories of navigating challenges, building resilience, and finding success in tough times.
  • Why you should listen: If you want raw, real stories of leadership and determination, this podcast offers invaluable insights into what it takes to lead in business.
  • Why it’s great for entrepreneurs, founders, and VCs: The podcast’s focus on perseverance and leadership makes it a must-listen for founders facing challenges in their business. VCs will gain insights into the traits that make strong, resilient founders.

Listen on: Spotify | Apple Podcasts



Image Source: Apple Podcasts

The Twenty Minute VC

  • What it discusses: Featuring short, insightful interviews with top VCs and founders, this podcast covers topics ranging from securing funding to scaling startups.
  • Why you should listen: Perfect for busy professionals who want quick, actionable advice on navigating the venture capital world.
  • Why it’s great for entrepreneurs, founders, and VCs: For busy entrepreneurs, this podcast delivers quick, actionable advice on funding and scaling. VCs can stay connected to the latest trends through bite-sized interviews with industry leaders.

Listen on: Spotify |Apple Podcasts


These podcasts are packed with insights, inspiration, and actionable advice for anyone looking to grow, innovate, or level up. Whether you're building something new, looking for investment know-how, or just eager to learn from those who've been there, each show has something valuable to keep you moving forward on your journey.

Download the dot.LA App

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