Dive Brief:

• In the wake of Amazon's Whole Foods purchase, many pundits believe the e-commerce giant will dominate the grocery market. But Bloomberg Gadfly columnist Sarah Halzack writes that traditional grocery stores may still have the advantage.

• Grocery shopping is still primarily done in brick-and-mortar locations, Halzack writes, and Amazon’s market share of the grocery market is very small in comparison to long-standing retailers like Walmart and Kroger.

• Consumers are still developing their preferences for online grocery shopping, which means there’s an opportunity for other retailers to win consumers away from Amazon.

Dive Insight:

In the e-commerce world, Amazon is the big shark. But in the grocery pool, it’s still a small fish, and its success isn’t necessarily the done-deal experts predict and retailers fear.

The company currently dominates online food and beverage sales, accounting for an estimated 18% of the market, according to Packaged Facts. But when it comes to shopping in actual grocery stores, the picture changes. Whole Foods accounts for a small fraction of industry sales, while major players like Walmart and Kroger dominate and are rapidly improving their in-store and online experiences.

Walmart, the world’s biggest retailer, has been remodeling stores in addition to expanding its popular click-and-collect program. Kroger, meanwhile, took a financial hit when the Amazon and Whole Foods deal was announced, but has rebounded with better-than-expected third-quarter earnings. Its ClickList store pickup service has expanded to hundreds of stores since it launched last year.

Shortly after Amazon purchased Whole Foods to grab a foothold in the grocery business, it decided to limit distribution of its own grocery delivery service, Amazon Fresh — an indication that it's still struggling to find its footing in the channel. The rapid expansion of small formats, including discounters and dollar stores, have made industry growth all the more challenging.

Amazon's entry into the grocery business is not a slam dunk. But consumers have long indicated that they want an omnichannel experience when they shop, as well as the added flexibility of being able to pick up their orders at store locations.

As customers rely more heavily on the ease, speed and convenience of e-commerce, they will increasingly extend those online buying habits to grocery shopping. Grocery e-commerce is expected to spike, with sales expected to more than triple over the next four years, to $42 billion. Even as Walmart and other retailers increase their online grocery presence, Amazon will have plenty of opportunity to nab customers, including its more than 80 million Prime members.

And that may be enough. Amazon is changing the game with a nearly holistic approach to shopping, in which a consumer can go to a grocery store to pick up a previously purchased coat or pair of shoes, or have a grocery item or a TV delivered to the house. Amazon may not totally dominate in groceries, but time will tell have big of a threat it poses to traditional retailers.