Digital grocery will become the largest ecommerce category by 2026, according to our US Digital Grocery 2024 report. To grow their share of digital grocery sales, brands need to understand what motivates consumers to buy groceries online, how the digital grocery experience can be improved, and where growth opportunities lie.

More consumers are shopping online for household essentials, including food and beverages and health, personal care, and beauty products. The two categories are expected to see the most growth in their share of ecommerce sales from now until the end of our forecast period in 2028. Here’s a closer look at the state of US ecommerce, why household goods are fueling the market, and the consumer behavior steering it all.

Digital ad spending will continue to accelerate in 2024. Retail will be a main driver due to its large ad outlays and growing contribution on the supply side.

Retail media works. For 77% of US organizations, retail media has either met or exceeded KPI expectations, according to a December 2023 survey from Skai and the Path to Purchase Institute. Only 3% say it had little or no impact on desired objectives.

CPG digital ad spending hits $48.79 billion in 2024: Its strength is driven by D2C strategies and increased search advertising.

In 2024, retail media ad spend will grow 28.6%, coming to just under $60 billion, per our forecast. To reach that potential, retail media networks (RMNs) need to identify what attracts advertisers and set them up for success. Here’s how three consumer packaged goods (CPG) leaders are thinking about retail media.

The Hershey Co. found a way to apply retail media data from Reese’s Peanut Butter Cups to other consumer packaged goods ads. The company learned that shoppers were buying shapes of Reese’s Cups based on their chocolate to peanut butter ratio, so it made two new products—one for peanut butter lovers and one for chocolate lovers, said Vinny Rinaldi, US head of media at The Hershey Co.

Amazon Fresh, despite failing to gain traction with its brick-and-mortar endeavors, is trying to assert itself in the grocery space. Its customer base, though much smaller than competitors like Walmart and Target, is attractive to consumer packaged goods (CPG) advertisers because those shoppers are open to trying new products.

Retail will account for more US digital ad spend (27.9%) in 2023 than the five lowest-spending industries combined, according to our forecast.

The store is no longer the only place where consumers can discover and shop for consumer packaged goods (CPG) products. Younger generations are finding products via search and social media, while Amazon Prime Day offers shoppers the opportunity to stock up on essentials for less.

This year’s Groceryshop 2023 event in Las Vegas focused on marrying in-store and digital experiences, the growing retail media wave, and the benefits of personalizing messaging based on each consumer’s motivations, among many other takeaways. All of that comes as US food and beverage retail sales are expected to reach $1.378 trillion this year and surpass $1.578 trillion in 2026, according to our June forecast.

Grocery shoppers are omnichannel shoppers, our analyst Blake Droesch said on a recent “Behind the Numbers: Reimagining Retail” podcast. That means consumer packaged goods (CPG) brands should employ a mix of digital and in-store advertising strategies to engage customers where they shop.

Walmart has the largest audience of any digital grocery platform. But our survey found that Amazon Fresh customers were more active and willing to try new products.

The travel and retail industries will post healthy digital ad spending growth figures this year, but many other verticals we track will underperform compared with the national growth average. Next year is looking better for almost all of them.

Digital activity now plays a major role in product discovery, with younger generations driving sizable shifts in the way shoppers find new products.

Digital ad spending growth in Canada continues apace, driven in large part by key industries tied most closely to the digital economy. Our rankings show that retail and CPG lead the way, while sectors like travel and automotive are still recovering from hard times during the pandemic.

eBay recently posted ad revenues of $367 million in Q2 2023—a growth of 35% YoY—in its latest earnings. But much of that can be tied to innovation in its ad types, improved measurement capabilities, and expanded third-party ads. eBay’s market also gives it a retail media opportunity outside of consumer packaged goods (CPG). Let’s break down what eBay is doing right.

Shopping habits foretell the next phase of digital growth for grocery products.

Amazon is the biggest retail media network in the US, accounting for three-quarters of retail media revenue share, per our forecast. But its limited grocery footprint leaves an opportunity for competition. Here are recent updates in grocery retail media, and a prediction on the future of in-store retail media.

Calendar context: With the invention of Prime Day, Amazon created an industrywide retail holiday consumers can now count on in the summer each year. Last year, Amazon also launched its Prime Early Access Sale in October. “We now have three key tentpoles,” said our analyst Andrew Lipsman on “Behind the Numbers: Reimagining Retail,” referring to Prime Day, the Prime Early Access Sale, and Black Friday. But spring remains untapped. “A question I get is, ‘Is Amazon going to do more of these?’ And I think the answer is yes, eventually,” said Lipsman.