The online grocery market continues to pick up speed, with sales expected to reach $100 billion by 2025. Pure plays like Instacart and digitally savvy national brands such as Walmart are investing aggressively on search visibility with the goal of capturing market share on a national level, according to L2’s report on grocers’ online search strategies. Yet by playing their cards right, local brands can still find success in the increasingly digital market.

The study finds that Instacart and Walmart maintain organic visibility on 43% and 35% of regional grocery terms respectively. They also complement organic visibility with paid spend on over half of these terms.

Local grocers can still find regional success, as customers tend to gravitate towards the familiar. In a recent Morgan Stanley survey, 22% of consumers had shopped online from a local grocer, whereas only 13% had shopped from a pure play grocer. But many regional grocers fail to play to this strength.

In San Diego, for example, Ralph and Vons are the dominant grocers with strong physical footprints. Online, Vons edges out Instacart and maintains organic visibility on 12 of 19 local grocer terms (e.g. “san diego online grocery”). The brand also complements organic visibility with paid spend on nearly half of these terms.

However, Ralphs fares less well. Though Ralphs, Amazon Prime Now, and Walmart all yield low organic visibility on grocery terms in San Diego, both Amazon Prime Now and Walmart invest heavily in SEM strategies to appear above Ralphs on San Diego grocery terms. By failing to keep up, Ralphs essentially leaves the door open for pure plays and national brands. This makes clear that as digitally savvy grocers continue to invest in online growth, local retailers should prioritize digital spend to remain visible on searches relevant to their market.

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