5 Investment Trends Driving Digital Grocery Growth in 2025

The digital grocery industry is set for transformative growth in 2025, with sales projected to increase by 9.7% and grocers doubling down on investments to enhance operational efficiency, personalization, and customer experience. Digital grocery sales have already soared 7.2% from 12.5% in Q4 2023 to 13.4% in Q4 2024, driven by rising customer demand for faster delivery, seamless omnichannel experiences, and personalized shopping journeys.

Grocers are now prioritizing key areas of investment, including AI-powered digital infrastructure, fulfillment technologies, omnichannel integration, and customer experience tools. With shoppers becoming more price-conscious and tech-savvy, grocers must innovate to stay ahead of consumer needs. Grocery Doppio research indicates that 53% of shoppers will switch grocers after just three poor digital experiences, while shoppers churn due to out-of-stock items, leading to a projected $7.4 billion sales loss for grocers.

This article highlights the top 5 investment areas for 2025 that will shape the future of digital grocery. From streamlining fulfillment to enhancing personalization, these investments will help grocers achieve sustainable growth, boost profitability, and foster customer loyalty.

Upgrading Back-End Infrastructure with AI-Enabled Systems

The modernization of back-end infrastructure is a critical focus for 2025, with 83% of grocers prioritizing investment in AI-enabled systems. By upgrading legacy systems, grocers aim to improve operational efficiency, reduce costs, and streamline workflows. AI will enable predictive demand forecasting, better inventory management, and automated order processing, leading to fewer errors and faster fulfillment.

Investment Focus Areas

• AI-Driven Automation: AI algorithms can predict demand, reduce out-of-stocks, and optimize reordering, cutting down operational inefficiencies.
• Inventory Management: Grocers are implementing real-time inventory visibility to reduce customer churn caused by out-of-stock items, which currently causes an estimated $7.4 billion in lost sales annually.
• Dynamic Pricing and Product Assortment: AI helps grocers set competitive prices and offer timely product recommendations, improving margins.

Spotlight On

Walmart's AI-Powered Search Engine: Walmart’s AI search engine goes beyond basic keyword searches, analyzing customer intent and generating personalized product lists. This innovation helps Walmart deliver faster, more intuitive search results, enhancing the customer experience and driving conversion rates.

Why It Matters

Shoppers expect faster delivery, personalized recommendations, and accurate stock listings.

Grocer's Takeaway

AI optimizes workflows, boosts efficiency, and reduces operational costs, creating a sustainable path to profitability.

Fulfillment Technologies for Faster Delivery and Same-Day Pickup

Consumers now expect faster, more reliable fulfillment options, and grocers are answering the call by investing in fulfillment technologies. In 2025, 72% of grocers will prioritize investments in fulfillment platforms to support same-day delivery, curbside pickup, and in-store collection. These enhancements ensure a smoother shopping experience, reduce wait times, and encourage customer loyalty.

Investment Focus Areas

• Store-Fulfilled Delivery: Grocers like Walmart and Target have introduced store-fulfilled delivery models, enabling them to ship items directly from stores instead of central warehouses.
• Curbside Pickup: Shoppers want seamless curbside pickup experiences, and grocers are enhancing their apps to provide real-time updates on order status.
• Last-Mile Delivery: Partnerships with services like DoorDash have enabled grocers to deliver faster and at a lower cost.

Spotlight On

Target's Fulfillment Model: By reducing shipping times, cutting last-mile delivery costs, and minimizing split shipments, Target has improved customer satisfaction while achieving operational savings.

Walmart's Q3 2024 Success: Walmart’s store-fulfilled delivery model contributed to a $2.5 billion monthly run rate, while paid expedited delivery was used in 30% of orders.

Why It Matters

‍Shoppers want faster, more convenient delivery options, with many opting for same-day services.

Grocer's Takeaway

‍Store-fulfilled models reduce last-mile delivery costs, cut delivery times, and boost customer loyalty.

Omnichannel Integration for a Seamless Shopping Experience

Omnichannel shopping is now the standard, with shoppers expecting consistent, seamless interactions across online, in-store, and mobile platforms. To meet this demand, 69% of grocers plan to invest in omnichannel integration in 2025. With omnichannel strategies, grocers can offer customers a unified experience, whether they shop via app, desktop, or in-store.

Investment Focus Areas

• Unified Shopping Carts: Allowing customers to start their shopping journey on mobile and finish it in-store or online.
• Omnichannel Loyalty Programs: Rewarding shoppers for purchases across multiple channels encourages deeper engagement.
• In-Store Mobile Integration: Integrating in-store experiences with mobile apps to support scan-and-go, mobile payments, and self-checkout.

Spotlight On

Kroger’s Precision Platform: Kroger's platform enables real-time inventory visibility and product recommendations, ensuring customers can view availability before arriving at the store.

Why It Matters

‍Shoppers want flexibility to shop in-store, online, or via mobile — and they expect it to be seamless.

Grocer's Takeaway

‍Unified omnichannel experiences improve engagement, reduce friction, and boost order frequency.

Personalization and Customer-Centric Experiences

Consumers are now accustomed to personalized shopping experiences, with 69% of grocers identifying personalization as a C-level priority for 2025. Grocers plan to use customer insights to drive targeted promotions, segmented offers, and custom recommendations, which enhance shopper engagement and satisfaction.‍

Investment Focus Areas

• AI-Powered Personalization: Personalized product recommendations and predictive promotions based on shopper behavior.
• Customer Data Insights: 58% of grocers are investing in data analytics to better understand customer needs.
• Personalized Deals and Offers: 93% of shoppers prefer personalized promotions, and grocers are using this insight to increase loyalty and conversion rates.

Spotlight On 

Walmart’s Content Decision Platform: Walmart uses AI to predict which content, ads, and promotions will resonate with each shopper, ensuring personalized, relevant experiences.

Why It Matters

‍Shoppers expect personalization at every stage of their journey, from search to checkout.

Grocer's Takeaway

‍Personalized offers increase engagement, loyalty, and conversion rates.

Customer Experience Through Mobile Apps and Loyalty

Mobile apps are fast becoming the hub of the customer experience, offering loyalty rewards, order tracking, and in-store navigation. Shoppers expect seamless, cross-platform experiences, and grocers are responding by enhancing mobile app capabilities.

Investment Focus Areas

• Mobile Loyalty Apps: Shoppers engage more when loyalty points, digital coupons, and order tracking are easily accessible.
• In-App Coupons and Rewards: 59% of shoppers reported increased usage of digital coupons in 2024, a trend that will accelerate in 2025.
• Enhanced Search and Discovery: AI-powered search helps shoppers find products faster, leading to better engagement and higher conversion rates.

Spotlight On
‍

Amazon’s Mobile App: With a focus on personalization, paid media, and user-friendly search, Amazon’s app delivers a smooth shopping experience.

Why It Matters

‍Shoppers expect personalized offers, smooth navigation, and fast checkout.

Grocer's Takeaway

‍By investing in mobile app development, grocers can improve customer retention and increase sales.

Conclusion

As digital grocery sales are projected to grow 9.7% in 2025, investments in AI, fulfillment, omnichannel integration, personalization, and mobile apps will define the industry's trajectory. Explore these trends further with the "State of Digital 2024: A Recap of Digital Grocery Spends and Trends" on-demand webinar and gain insights into the strategies shaping the future of grocery.