Key trends highlighted in the report include:
- Grocery tech presents a large, opportunistic market with solid growth: The global grocery retail market is expected to reach $15TN by 2030 from $9TN in 2022, growing at a 6.9% CAGR during 2023-2030. Grocers are investing more in technology to boost efficiency and improve customer experience, largely focused on dynamic pricing, ordering and delivery, and automated store technologies
- Digital promotions will continue to play an important role in an inflationary environment: 61% of retailers believe digital promotions will be crucial in the next 12-18 months and believe they must enhance promotions to maintain spending from inflation-hit customers. Retailers with established loyalty programs are in a prime position to do so by using data to offer hyper-personalized, targeted promotions; this is evidenced by one-third of grocers upgrading their loyalty initiatives and companies like Instacart acquiring Eversight in Sept ‘22 to optimize pricing and promotions going into ‘23 and beyond
- Micro-fulfilment centres and related tech are in high demand as omnichannel strategy continues: With online grocery shopping remaining a growing trend, micro-fulfilment centres are being used exclusively for optimizing online grocery deliveries4. Technologies supporting the rapid setup of micro-fulfillment centers are receiving increased attention; as evidenced by Walmart acquiring Alert Innovation in Q4‘24, which specializes in robotics for e-grocery order fulfillment, to enhance their omnichannel grocery fulfillment
- A combination of existing and new technologies makes up the e-grocer’s differentiation against the competition: Certain grocery retailers are outpacing their counterparts in terms of innovation. A prime example is the e-grocer Weee!, which is harnessing pivotal technologies such as gamification, automation, video integration, and user-generated content to customer satisfaction and convenience. The e-grocers are actively securing funds to implement and integrate technological innovations
- Retail media is playing a pivotal role in shaping retailers’ global profits: Prominent retailers are strategically channelling the profits derived from RMN toward their business growth. Walmart’s significant growth in ad revenue holds great importance as it serves to offset the expenses associated with new fulfilment and distribution centres, as well as their expansion in the grocery category. In 2022, Walmart experienced a remarkable 30% increase in ad revenue reaching ~$3BN, which in turn is bolstering their profit margin
- M&A remained a key strategic priority in 2022-H1’23: Grocery technologies were of increasing interest to strategic buyers in H1’23, with 48 notable deals completed in the period, 60% higher than H2’22. Digital promotions and fulfilment technologies were the most sought technologies, with Neptune’s acquisition of Quotient Technologies and the sale of GK Software to Fujitsu
To provide a deeper understanding of the sector, our report includes key disruptors, industry landscape, and notable M&A and fundraising transactions activity (including major deals within the last 24 months).