The grocery industry is undergoing a major digital shift. More than 90 percent of customers now buy both online and in-store, and online sales of consumer packaged goods are growing nearly five times faster than in-store sales. According to FMI/NIQ projections, U.S. online grocery sales will reach $388 billion by 2027 — outpacing previous forecasts as digital adoption accelerates.
Nick Nickitas, general manager of independent grocery and mid-market retail partnerships at Instacart, has spent more than a decade focused on helping local grocers succeed online. He previously founded Rosie, an e-commerce platform built for independent retailers, which was acquired by Instacart in 2022.
In this article, Nickitas outlines three key trends shaping the future of grocery and shares how independents can turn e-commerce from a cost center into a profitable, sustainable growth engine.
What emerging trends do you think will reshape grocery e-commerce in the next two to three years?
Nickitas: Three shifts are creating real opportunities for independent grocers right now. First, AI is finally becoming practical – we’re seeing retailers get 15 percent better conversion rates just by adding smart chatbots to help customers quickly find what they need. With Instacart’s Storefront solutions, independent grocers can now tap into these same capabilities to enhance and customize their e-commerce experience without a heavy technical lift. Second, retail media is no longer just for the big guys. Through solutions like Instacart’s Carrot Ads, Independent grocers now have access to national brand budgets that unlock new revenue streams that previously required massive scale. Third, your customers are already shopping everywhere – 90 percent of them use both online and in-store. The winners will be retailers who make switching between channels feel seamless, not jarring.
How can retail grocers take advantage of these trends now?
Nickitas: Start simple and build momentum. Nail the basics first – a mobile app that actually works, accurate online inventory and convenient delivery that brings your store to the customer’s door. Then build from there. Don’t try to beat Amazon at scale – lean into what makes you different: your local expertise, unique selection and community relationships. The technology exists today to get you competitive quickly. What matters most is choosing platforms that grow with you and integrate with how you already operate.
What customer experience innovations are you seeing that significantly impact results?
Nickitas: The game-changers are surprisingly simple. Family shopping – where multiple people can add to the same cart – drives bigger basket sizes. Smart substitutions that remember preferences such as, “she always wants organic,” build loyalty. And progress bars showing how close someone is to saving on a delivery fee? They work. When people can see they’re $8 away, they find something to add. These aren’t flashy features – they solve real problems and your customers will actually use them. People want to shop from stores that help them save.
How are retailers transforming their traditional weekly circular into a seamless, shoppable digital experience?
Nickitas: The smart move is making your circular interactive instead of just informative. Customers should be able to tap a featured item and add it straight to their cart. Even better, personalize the circular based on what they usually buy. If someone shops organic consistently, show those deals first. Extend your circular everywhere — social, email, even QR codes in-store. The goal isn’t just awareness — it’s removing every possible friction between seeing a deal and acting on it.
What merchandising and marketing capabilities are retailers demanding from their e-commerce platforms in 2025?
Nickitas: Retailers want tools that don’t require a computer science degree to use. They need to create targeted promotions, measure results and make adjustments without relying on tech support. Dynamic pricing is a growing must-have – not just for sales, but for staying competitive day-to-day. The biggest request I hear is content management that actually works. Retailers want to schedule seasonal campaigns, spotlight new products and promote local suppliers without waiting weeks for someone else to make it happen.
How are retailers transforming their e-commerce operations from cost-centers into profitable revenue streams?
Nickitas: Retail media is a standout – this once-exclusive opportunity is now accessible through the right partnerships. If you have customer traffic, brands will pay for targeted placement. We’ve teamed up with ROFDA to power the retail media network and e-commerce sites for thousands of stores across seven cooperatively owned wholesalers. It’s incredibly inspiring to help multi-generational local independent grocers attract and win retail media dollars so they can enhance profitability and compete on a level playing field.
How are retailers leveraging customer purchasing and other data?
Nickitas: The best retailers use data to better serve their customers. They track purchase patterns to manage inventory, suggest logical add-ons, alert customers when favorites go on sale, and recommend recipes based on preferences. The key insight: you already own the data and the relationship. Use it to make the shopping experience easier, faster and more personal.
How are retailers measuring the success of their private label promotion efforts?
Nickitas: Go beyond sales volume. Look at whether private label buyers are more loyal, shop more frequently and spend more over time. Create targeted intro campaigns: samplers, first-time buyer offers and bundles that pair your private label with basket-building discounts. Then measure both immediate sales and long-term behavior change. Success isn’t just moving private label products; it’s building customer trust in your ability to find and curate quality while providing exclusive brands they can’t find anywhere else.
How does technology like Instacart’s Storefront Pro support grocers with their specific needs and competitive position?
Nickitas: Storefront Pro gives you enterprise-level capabilities at an affordable price to compete on a level playing field. You get sophisticated merchandising tools, integrated loyalty programs, family shopping features, and retail media opportunities, all designed to work with how you already operate. What I love about it for independent grocers is that it preserves what makes you special – your brand, your customer relationships, your local expertise – while giving you the digital tools to compete with anyone. It’s supported by our incredible team that is enthusiastically dedicated to our local independent grocery partners. We handle the complexity so you can focus on what you do best, taking care of your customers and serving your community.
About the author
Nick Nickitas is general manager of independent grocery and mid-market retail partnerships at Instacart, where he leads growth and strategy for a key segment of the retail industry.
Before Instacart, he was founder and CEO of Rosie, an e-commerce platform that empowered local grocers with tools to compete online. Under Nickitas’ leadership, Rosie became a trusted partner to independents nationwide and was acquired by Instacart in 2022.
With over a decade of experience at the intersection of grocery and technology, Nickitas continues to help retailers modernize and thrive in a rapidly evolving digital landscape.
