Walmart is the largest grocer in the United States for the third year in a row. Despite doubling-down efforts on online grocery delivery, Kroger has continued to trail Walmart’s grocery operations.
As both retailers expand their online grocery offerings to more parts of the country, Hitwise wanted to dive deep into the online retail analytics to determine whether Kroger or Walmart is winning online grocery.
1. Walmart shoppers are more engaged
However, Kroger takes the cake when it comes to website visits.
During the 13 weeks ending 8/24/19, Kroger received over 113 million visits, which was 1.5x greater than Walmart Grocery. Despite this lead, Walmart’s grocery visits are growing +68% YoY while Kroger’s visits are down -20% YoY.
Walmart’s advantage becomes clearer when we consider purchases and engagement. Walmart Grocery registered 5.4 million purchases during the same 13-week period, amounting to a conversion rate of 7.3%. In comparison, Kroger generated 1.2 million purchases with a conversion rate of 1.2%.
Why is Walmart converting at a higher rate? Walmart’s grocery shoppers are spending 3.5 minutes more per visit than Kroger shoppers and viewing an average of 3 more pages.
2. Core customers differ by market, income, & age
When comparing customer bases, Walmart has 3.6x as many exclusive customers as Kroger does. An exclusive buyer is someone who makes purchases from one retailer but not the other. Still, there are 35K shoppers who buy groceries online from both Walmart and Kroger.
What’s the difference between their exclusive shopper bases?
While the majority of shoppers at both retailers are 55-64 years old, Walmart attracts a younger and lower-earning audience while Kroger’s shoppers are more likely to be retired.
Although 25-34 year olds comprise the largest segment of online shoppers, both grocers under-index with this age group.
Kroger’s roots are in the Midwest so it makes sense that the grocer over-indexes with shoppers from cities like Cincinnati, Indianapolis, and Detroit. Walmart grocery online shoppers are more likely to live in Southern cities such as Houston, Tampa, and Orlando.
3. Kroger generates more branded searches
Walmart has more online grocery customers than Kroger, but Kroger generates more branded search terms.
18% of the top 500 internal searches on Kroger were for branded items compared to 10% on Walmart Grocery.
Several of the top branded search terms were common among the grocers. PepsiCo received the most branded terms for “gatorade”, “pepsi” and “doritos”. In general, beverage brand terms were the most widely used at both Kroger and Walmart. Other CPG companies with top branded terms at both retailers include Coca-Cola (Coke, Diet Coke), Nestle (Lean Cuisine, Hot Pockets), and Kraft Heinz (Lunchables). Brands looking to increase their presence can leverage the generic terms used within their category to optimize product descriptions and sponsored posts by retailer.
Although Kroger shoppers use more branded searches than Walmart shoppers, both audiences still mainly use generic terms. Most consumers doing online grocery shopping search for basic items, such as milk, eggs, produce, and bread.
Where do they differ?
Walmart has a greater advantage within the snack and household categories. Walmart shoppers are looking for personal care items, such as toothpaste and shampoo, at higher rates than Kroger shoppers. Meanwhile, Kroger shoppers search for more meat & fish and frozen items. Kroger shoppers are also searching for Kroger-specific promotions, like Free Friday downloads and Buy 5 Save 5, and Kroger private label brands, which both fall under Other.
Now that we’ve compared Kroger and Walmart Grocery from several angles, here are the key takeaways:
- Walmart generates more purchases online because engagement is higher
- Younger & Southern shoppers choose Walmart while retired Midwesterners prefer Kroger
- Kroger shoppers use more branded searches, which is better for brand partnerships
- More shoppers seek household products at Walmart and specific deals and private-label brands at Kroger
From a numbers perspective, Walmart Grocery is winning online grocery. A growing audience of exclusive shoppers bodes well for the retailer. However, Kroger shoppers are using brand-specific terms for both Kroger and their brand partners. In this sense, Kroger may have the upper hand when it comes to strengthening a concentrated but loyal base of customers.