The Case of Digital Transformation in Grocery Business: A Conceptual Model of Digital Grocery Ecosystem

Companies are increasingly looking for ways to understand and innovate their business models by leveraging digital transformation. Evolving consumer attitudes and behaviors, technological advances, new competitive pressures, and laser thin margins—accelerated by the COVID-19 pandemic—are driving digital transformation in the grocery business. We introduce a conceptual model of digital grocery ecosystem to advance our understanding of digital transformation of the grocery business. We analyze digital transformation initiatives of the top five grocery companies in the United States using inductive research and content analysis. We find that brick and mortar, e-commerce companies, as well as new start-ups, are making major investments in all aspects of the digital grocery ecosystem—the online shopping experience for the digital consumer, digital store operations, pickup and delivery mechanisms, and advanced analytical and digital marketing capabilities. Retailers are also connecting their investments to enhanced customer loyalty, revenue, and ultimately profit.