Category Archives: On-line food shopping

Study Predicts Increased Investment for Online Grocery

A recent SupermarketNews article reported the “digital sector” will continue to grow in 2023.

“Grocery operators’ spending to support digital transactions will increase by 2.3% next year despite a 1% shrinkage in technology budgets,” the article said, citing an October report from Grocery Doppio, a grocery insights and data provider. ,

Other findings:

  • 23% of grocers plan to increase their technology spend on digital in 2023
  • 77% said fulfillment efficiencies will be among the three most popular investments
  • 67% identified digital basket size nurturing would be a focus
  • 55% said system-wide inventory data accuracy/transparency would be a priority

Read the full article…

Kroger Growing Grocery Sales With Spokes

A recent SupermarketNews article reported that Kroger is continuing to grow e-commerce through expansion and by leveraging technology.

The article said two more automated “spoke” supporting facilities have been opened as “The Kroger Co. continues to build out its e-commerce network driven by Ocado Group technology, a Canada based firm.

As you may know, the spokes serve as a last-mile cross-dock sites for online grocery delivery and help extend the reach of delivery service. The hub and spoke model refers to a distribution method in which a centralized “hub” exists. Everything either originates in the hub or is sent to the hub for distribution to consumers. From the hub, goods travel outward to smaller locations owned by the company, called spokes, for further processing and distribution.

“The continued expansion of the Kroger fulfillment network means improved access to fresh food for customers eager for the variety and value offered by Kroger that once could only be accessed through our stores,” Gabriel Arreaga, senior vice president and chief supply chain officer at Kroger, said in a statement. “This network enables Kroger to add scale, achieve reliability of experience, gain from the benefits of automation and ultimately widen our customer reach in current operating regions and new parts of the U.S.”

USDA Supporting SNAP Online Grocery Shopping

A recent SupermarketNews article reported that the U.S. Department of Agriculture (USDA) is launching a $5 million competitive grant program to help expand the number of retailers that offer recipients of Supplemental Nutrition Assistance Program (SNAP) benefits online grocery shopping.

Retailers will need to apply to participate in the program, which will provide support with the “technology and systems necessary to enable SNAP e-commerce,” the article said.

The piece went on to explain the objective is to give SNAP participants access a larger diversity of retailers while shopping for groceries online, according to a source at the USDA. The grant is funded by the American Rescue Plan stimulus legislation, enacted last year.

The article then quoted Stacy Dean, deputy undersecretary for food, nutrition and consumer services at USDA, who released a statement saying, “Online grocery shopping is a vital resource that improves access and convenience for all, including low-income families. We are excited about this grant’s potential to provide new and existing retailers with tools to redeem SNAP benefits in ways that improve customer service for SNAP participants, especially those that face barriers in traveling to a physical store.”

Read the full article…

Walmart Increasing Drone Delivery

A recent SupermarketNews article reported that Walmart plans to roll out more drone delivery options for online orders to six states, encompassing 4 million households via the service.

The piece quoted David Guggina, senior vice president of innovation and automation for Walmart U.S., who said, “Walmart aims to expand DroneUp delivery to 34 sites in Arizona, Arkansas, Florida, Texas, Utah and Virginia by the end of 2022.”

According to the article, once implemented the move will give Walmart the ability to deliver more 1 million packages by drone annually.

In preparation, Walmart had made trial deliveries of COVID-19 home test kits, which demonstrated that drones could provide delivery in minutes rather than hours; and while it was initially expected that consumers would use the service for receiving emergency goods, they’ve found people are using it for the convenience, like a “quick fix for a weeknight meal.”

Another example of leveraging technology to initiate change that enhances online shopping, the customer service and the customer experience.

The Evolution of Online Grocery Shopping

A recent SupermarketNews article shared insights into how the dynamics of the online grocery market have changed.

Not only are more shoppers using online grocery options than before COVID, but they are also split in which “type” of online platform they prefer.

This nuance bodes well for how conventional grocers can strengthen their online grocery services to improve performance, because it turns out they aren’t really competing with the mass merchandisers who are far more developed in executing their respective online strategies and who operate on a much larger scale.

“We know from Brick Meets Click’s monthly e-shopper research that today’s shoppers choose to place online grocery orders with mass merchandisers for very different reasons than when they choose to place online orders with conventional grocers,” the article said. “In this context, mass rivals are not conventional grocers’ most meaningful competitor.”

A few additional data points from their research that conventional retailers should consider include:

  • In 2019, stores that had operated an online grocery service for a longer period of time reported higher weekly sales. This correlation no longer exists. COVID has changed the circumstances that drive adoption and usage.
  • The impact of a store’s service area population has also shifted. In 2019, stores in the largest markets generated the highest level of weekly sales; today, stores in mid-sized markets reported the strongest sales. In high-population areas, there is simply more competition for online grocery spending than there used to be. This makes it harder to grow without expanding in other ways.
  • Offering customers a choice between pickup and delivery instead of just one option continues to have a significant impact on sales.

Amazon Reduces Waste with New ‘Curbside Recyclable’ Delivery Packaging

SupermarketNews recently reported that Amazon has unveiled a new sustainable food packaging solution for the point of delivery.

The article referenced a statement from Stephenie Landry, vice president of Amazon Grocery, indicating perishables deliveries from Amazon Fresh and Whole Foods Market now will come in “curbside recyclable” insulated paper packaging.

“Rolling out just in time for Thanksgiving, Amazon’s new packaging is made from recycled paper and is curbside recyclable. Whether customers are ordering turkey, green beans, or frosty pints of ice cream, chilled and frozen foods from Amazon Fresh and Whole Foods Market will arrive insulated in packaging that is easy and convenient for customers to recycle at home.”

As part of Amazon’s overall sustainability effort, they say the new packaging will replace of the plastic liners and bubble bags that are often used to insulate chilled and frozen items. It will also cut back on material waste they claim, replacing about 735,000 pounds of plastic film, 3.15 million pounds of natural cotton fiber and 15 million pounds of non-recyclable mixed plastic annually.

Key considerations in developing the new packaging included sending less material to landfills and more back into the circular economy loop while ensuring that the insulated material properly chilled the food inside and was compact, flexible, easily recyclable, inexpensive and scalable, according to a company spokesperson.

Online Shopping Preferences

A recent SupermarketNews article shared the results of the latest NielsenIQ omnibus poll, which indicated U.S. online shoppers value speed of delivery.

“Same-day delivery, same-day pickup and next-day/later pickup all gained traction among online consumers during the COVID-19 pandemic, whereas two-day and next-day delivery lost interest,” the article said.

Their findings were based on NielsenIQ’s Omnichannel Shopping Fundamentals Survey, conducted in February and March 2021. Other findings of note include:

  • 61% of online grocery shoppers said they prefer same day deliver. This compares to only 27% of shoppers saying they considered same day delivery in September of 2020, versus only 20% in 2019
  • 39% of online shopper panelists claimed a preference for having their product deliveries consolidated in one shipment to reduce packaging and frequency of trips, even if it extended the delivery time
  • 63.2% of homes with children favored quick delivery versus 59.8% of households without kids

Tech-Driven Improvements an Emerging Trend in Supermarkets

The mounting demand for e-commerce due to COVID-19, and the expectation that it will be necessary to continue offering many of the “new normal” services post-COVID, has resulted in a number of grocery chains making major changes to their infrastructure and improvements in their processes.

As reported by SupermarketNews, some of the process and facility enhancements include:

  • Conversion of store or shelf-space to accommodate online order fulfillment
  • Creation of automated micro-fulfillment centers (MFC’s) to support automated fulfillment for grocery delivery, sometimes referred to as “dark stores” since they have no retail space
  • Curbside pickup
  • Installation of automated pickup points, enabling customers and delivery personnel to drive up, scan a code and retrieve their orders

The expectation is that those retailers who are able to convert store space or operate MFC’s will be better able to scale their business as the demand for e-commerce continues to grow.

“For grocers to adapt and stay relevant — and for consumers to eat the cost of the last mile — grocery retailers need to embrace curbside pickup,” said Rob Wilson and Shang Saavedra in a recent report from L.E.K. Consulting.

“Given that stores are designed for optimal in-store shopping, it’s often inefficient for staff to wander through aisles to assemble orders and, when it comes to operating margins, far from sustainable. Moreover, stores have been forced to quickly create online pickup areas, leading to messy front-of-store experiences for consumers.”

Clearly the costs associated with some of the major changes such as building stand-alone MFC’s favor the larger retailers. One possible solution for smaller chains might be the use of “solution partners” to get the job done.

Either way, and as noted in a recent SupermarketNews article, all indicators say that online grocery shopping and curbside pickup are here to stay.

2020 Saw Big Growth in Omnichannel Shopping!

A recent SupermarketNews article reported that omnichannel consumption grew by 50% this past year, and nearly half of all consumer goods purchases were made via e-commerce.

The report was based on new research from Nielsen.

Not surprisingly, both food and nonfood products have seen marked shifts in omnichannel shopping since the COVID-19 outbreak, and the number of shoppers who deem themselves as “heavy” or “exclusive” online shoppers for everyday items jumped 133% from September 2019 to September 2020.

The article went on to quote Nikhil Sharma, vice president of North America consumer analytics at Nielsen, who said, “Within the U.S., new behaviors have emerged that retailers and manufacturers must acknowledge, accommodate and swiftly act on — especially as online shopping habits begin to solidify. While we do expect a return of some kind to pre-pandemic habits, consumers will not be returning to a pre-pandemic retail environment.”

Order History Tool Most Popular as Consumer Preferences Shift
The article also pointed out that, when making online transactions, 29% of consumers polled by Nielsen found the order history tool to be the most helpful feature when shopping for nonfood items.

In a final statemen Mr. Sharma added, “Undeniably, consumers have more choices than ever in their path to purchase, meaning as consumer needs and preferences continue to evolve, it is crucial to have an omnichannel strategy in place to sustain and grow momentum in 2021.”

Pandemic Fuels Online Food Shopping

Canadian food and drug retailer Metro Inc. has experienced a coronavirus-fueled spike in demand for online food shopping, which experienced tripled-digit growth this quarter.

The SupermarketNews article quoted Metro President and CEO Eric La Flèche, who said, “Our food business experienced high levels of sales, as the large portion of restaurant and foodservice sales transferred to the grocery channel.”

Certainly the “new normal” has had an impact on businesses of all types, forcing organizational leaders to find new ways of providing value and an enhanced customer experience, as noted in our previous post.

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