Kroger’s Innovative Step-up

Spring-boarding from our previous post on emerging innovations within the supermarket industry, Kroger has exemplified such behavior by launching new new drive-thru test sites for coronavirus.

According to a recent SupermarketNews article, the chain will be offering free drive-thru testing for COVID-19 at 50 locations in more than 12 states by the end of May, and expects to have conducted up to 100,000 tests by that time.

So far, Kroger’s healthcare arm, said it has performed almost 8,000 tests in 30 locations.

The article goes on to quote Rodney McMullen, Kroger Chairman and CEO, as saying, “As part of Kroger’s commitment to help America reopen safely, we are proud to help expand access to COVID-19 testing as a partner in the U.S. Department of Health and Human Services Public-Private Testing Partnership.”

Not only is the drive-thru aspect of Kroger’s testing model innovative, but so too is their methodology. Their sites use anterior nares or mid-turbinate nasal swab tests, which are designed to increase safety. The tests are completed in just a few minutes using self-administered test kits, and results are expected within about 48 hours.

In a recent Harvard Business Review article, Bill Taylor, co-founder of Fast Company and the author of Simply Brilliant: How Great Organizations Do Ordinary Things in Extraordinary Ways shared some great examples of how bad times have brought out the best in people and organizations.

Possibly this free testing being offered by Kroger will be remembered as such in the future?

Necessity & Innovation

Nearly everyone we ask says that they want to be innovative — the best returns come to those who are first to market with a new product; those who innovate new and better processes can provide much better quality at much lower costs; those who can create a management system or culture that constantly is clicking on all cylinders can have a powerful advantage.

But how often do they happen, and why?

In our experience and research, we find that innovation is truly enigmatic:

  • Large organizations have more wherewithal to invest in systematic innovation, but smaller organizations seem more capable of capitalizing on innovative ideas.
  • Most innovations come not from visionaries at the top but from people closest to the work. Yet paradoxically, strong leadership and vision at the top of the organization are required to create an environment that fosters innovation and risk taking. Without strong leadership, organizations become bureaucratic and risk-averse.
  • Outsiders often have the most innovative ideas, but insiders’ know-how and buy-in are required to get them implemented.
  • And possibly most relevant during the current pandemic, adversity or “necessity” often brings about innovative solutions.

A recent SupermarketNews article notes that current world challenges have been exceptionally tough for supermarkets, and that the associated difficulties have brought about significant and innovative improvements in how stores are being run… now and possibly in the future!

“The first hint of the virus reaching our communities ignited the shock of an overwhelmed supply chain,” said Randy Evins, Senior Principal and Industry Advisor.

“A couple of weeks later, the consumer experience was further diversified with online pickup services, home delivery and special hours reserved for vulnerable shoppers. Some local grocers have also installed plexiglass protectors around their checkout stations and added floor markers to help ensure shoppers are standing six feet apart while waiting in line.

“There’s unquestionably a lot of ingenuity happening in supermarkets right now. But there is one area of the business that still requires attention — especially if grocers want to continue surviving this constantly evolving time as well as the eventual rebound to come.”

The article goes on to stress the importance of leveraging digital technology to ensure that all variables are considered in “real time” when making inventory management and ordering decisions.

“Digital strategies must go even deeper to cover the entire value chain — addressing the need for connected processes, real-time transactional data and immediate visibility into store-level inventory,” Evins said.

“Supermarkets can no longer afford to order new products and additional inventory blindly. They need to know what is available on their store shelves, store backrooms and distribution centers — by SKU and quantity and in light of forecasted demand.”

In support of this perspective, the article cites predictive data indicating that 25% to 30% of a grocer’s sales volume will consist of digital orders by 2025, compared to 6% to 10% today.

Evins went on to say that the use of technology, as described, will enable store employees to “have the visibility and insight they need to work more efficiently, safely and productively while keeping consumers happy and coming back over and over again.”

Certainly, given today’s circumstances, necessity has truly been the “mother of invention.”

Read related newsletter…

Supermarkets Offering Innovative Improvements & Solutions

Necessity is the mother of invention, the adage says. Certainly, we’ve seen many examples of innovative thought and practical improvements put in practice in supermarkets throughout the U.S. during this pandemic.

For example, to promote social distancing, H-E-B was among the first to offer its customers a deal that to keep them out of lines and away from large crowds. Their stores across Texas provided free, next-day curbside ordering and pharmacy deliveries to help slow the spread of COVID-19.

“We are working diligently to provide solutions for seniors and Texans in need to access food and supplies with limited public interaction,” the company wrote.

They and many others also shortened store hours to better serve customers and to give team members more time to restock more quickly-depleted shelves, thus increasing product availability.

Stop & Shop was among the first to offer designated shopping hours for seniors, a step taken to help create a safer and more comfortable shopping environment for those most susceptible to the virus. Many have followed…

Albertsons was the first major company to announce they will install plexiglass “sneeze-guard” barriers at checkouts in its 2,200 stores… Walmart and Kroger have made similar commitments… Whole Foods also confirmed it’s in the process of rolling out sneeze guards at all locations to protect customers and Team Members at the registers.

Additional examples of best practices and suggestions were recently shared by the The Brookings Institution, a nonprofit public policy organization based in Washington, DC that conducts research into new ideas for solving societal problems. Among their recommendations are the following, which many supermarkets have put into practice of their own accord:

“Employers need to implement immediate steps to reduce grocery workers’ exposure to COVID-19 by expanding access to personal protective equipment (PPE) such as masks and gloves and end any restrictions on workers wearing them. While supplies of protective masks and gloves are extremely limited across the country, employers and policymakers should prioritize PPE for grocery workers as they become available.”

“Employers should provide adequate cleaning supplies and hand sanitizer, regular opportunities for workers to wash their hands, and frequent equipment cleaning.”

“Stores should shorten hours and limit the number of customers at any given time.”

“Grocery stores should implement additional measures to protect workers and enforce safe spacing of customers.”

Order for Pick-up Best Practices

A recent SupermarketNews article referenced the fact that the gross majority of people in the US own a smartphone and that this has led to a “NOW” economy where almost everything consumers want is available at their fingertips or on-demand. “These expectations provide a great opportunity for grocery brands to grow revenue if they can provide the pickup experience that customers are looking for,” the article said.

The piece went on to cite data from Rakuten Intelligence indicating that “Order for Pickup” has grown 2.5x faster than delivery over the last 3 years and that over 60% of consumers having tried curbside pickup or “click and collect.”

To capture those valuable and loyal mobile-first customers, grocers must be prepared to offer the right products as well as a top notch experience.

In fact, the article referenced a study by PWC highlighting that 73% of customers point to experience as a critical factor in their purchasing decision.

The following 5 best practices were then identified as critical to a successful Order for Pickup program:

  1. Focus on logistics and infrastructure. Clear signage, dedicated parking and pickup areas will reduce wait times and positively impact the customer experience.
  2. Leverage data to personalize the experience. The lower the wait time and the more personalized the experience becomes, the higher the customer perception of the overall shopping experience.
  3. Optimize technology to alert employees when customers arrive to pickup their orders.
  4. Provide dedicated employee training so they can provide high-levels of service.
  5. Promote your program to drive awareness and usage.

SpartanNash Reducing Food Waste & Enhancing Customer Service with Flashfood

An earlier post featured SpartanNash for leveraging technology to enhance their online and order pick-up processes. Today we once again focus on the company as they have launched an innovative program to reduce food waste while enhancing customer service.

According to a recent Progressive Grocer article, SpartanNash is piloting a Flashfood mobile app at five of its West Michigan Family Fare stores, allowing customers to purchase meat, produce, seafood, deli items and bakery products that are nearing their “best-by” date at up to 50% off.

As you may know, Flashfood is a Toronto-based mobile app that operates in more than 440 grocery locations throughout Canada and the US.

After downloading the Flashfood app, customers can select a participating Family Fare store, choose items, pay for them directly on the app, and then pick up their items at the store’s customer service counter, where the purchased items are stored in refrigerators.

“Customer convenience is key with the app,” said Matt Bennett, Director Retail Consumer Innovation at SpartanNash. “This app is a win-win for customers and the environment.”

Read the full article…

Despite Mid-west Closing of Peapod, Ahold Expects Robust e-Commerce Growth

Ahold Delhaize, whose supermarket brands include Stop & Shop, Giant Food, Giant/Martin’s, Food Lion and Hannaford, recently announced that they will be closing the Midwest division of its Peapod online grocery arm.

However, the company also noted that the Peapod Midwest closing isn’t expected to have a significant impact on the previously announced goal to drive 30% U.S. e-commerce growth in 2020.

According to a SupermarketNews article, Ahold plans to focus on markets in which they already enjoy a strong presence. Going forward, Peapod Digital Labs will support online grocery delivery and pickup service for all Ahold Delhaize USA’s supermarket brands. The article also noted that Ahold “aims to establish those brands as the leading omni-channel grocery retailers in their market areas.”

“To continue our strong track record of sales growth and market share gains, we are accelerating our growth and expanding the leadership positions of our businesses in our East Coast markets,” Ahold Delhaize USA CEO Kevin Holt said. “This move will enable us to fully focus on markets where we have strong store density, leading market share and a longstanding heritage of customer loyalty.”

Tech Driving Customer Experience at SpartanNash

SpartanNash is leveraging GPS location technology to improve curbside service in its Fast Lane online grocery pickup program. According to a recent SupermarketNews article, a number of the chain’s locations are now using Radius Networks’ location-based FlyBuy Pickup service with ShopperKit’s in-store grocery fulfillment software to bring out Fast Lane orders to customers as soon as they arrive at the store.

Referenced as a “click-and-collect platform,” the process begins when a customer places a Fast Lane curbside order. The order is fulfilled and the customer is notified when their groceries are ready for pickup. The customer can then share their location via mobile apps or a web browser to let their Fast Lane personal shopper know they’re heading to the store. That allows customers’ orders to be prepared and delivered to their vehicles the moment they pull into the pickup area.

“This new technology will completely change our customers’ experience with Fast Lane,” said Brian Holt, vice president of marketing for SpartanNash.

“Fast Lane already provides exceptional customer service, with overall satisfaction scores 30 points higher than the national average, as well as some of the nation’s leading fulfillment rates. And our new GPS location technology will only improve the ease and speed of the Fast Lane experience.”

This is another good example of how today’s supermarkets are leveraging technology and continuous process improvement to drive customer service and the shopping experience.

Pros & Cons of a 2020 Grocery Trend: Delivery

A recent article published by datecheckpro.com cited a Coresignt study indicating that “36.8% of internet-using adults polled bought groceries online in the previous 12 months, up from 23.1% in their 2018 study. That equates to approximately 93 million online grocery purchases using U.S. Census data.”

Interestingly, according to SupermaketNews, the majority of these purchases came from Walmart and Target, followed by Kroger. Walmart and Kroger have more than doubled their online grocery shopper numbers over the past 12 months, their report said. This alone translates to adding about 20 million and 6 million online customers, respectively. In addition, and as we all know, Amazon has become active in selling groceries. So, all things considered, it’s a fair assumption that online grocery shopping and home delivery are here to stay.

It’s also fair to say that, before long, consumers will demand online shopping and delivery from smaller independent stores as well.

For retailers, there are pros and cons to offering this service.

According to the article, top reasons in favor of offering online ordering and home delivery are:

  • It satisfies consumer demand for convenience.
  • It enables a retailer to get on the bandwagon of what is clearly a trending service in the industry.
  • Since the transactions are all digital, retailers get more insight into customer shopping habits and preferences – good data!

On the negative side:

  • Delivery is not easily accessible for all grocers, especially smaller stores in more rural America. Bigger chains like Walmart, Target, and Kroger have success with their grocery delivery services because they have the financial, operational and people resources to handle the complicated logistics.
  • The first “con” leads to the fact that smaller grocers will likely need to outsource the delivery portion of the equation, thus losing a good deal of the control associated with that piece.
  • Costly initial investment

Read the full article…

Interesting 2019 Center Store Trends… And One Not So Surprising

2019 Center Store Trends

A recent SupermarketNews article shared some interesting data on center store trends this past year, along with a supporting slide show.

International foods and private wine labels had a solid impact on inventory and merchandising decisions, as did offering health and beauty products containing cannabidiol.

“Health & wellness, “clean” products and authentic flavors were the drivers behind sales growth in center store in 2019,” the article said.

Not surprisingly was the biggest challenge faced by retailers: fighting off online retail.

View slide show…

Giant Eagle Pharmacy Customers: Just Ask Alexa!

According to a recent SupermarketNews article, Giant Eagle, a Pittsburgh-based food and drug chain, has formed an arrangement with Amazon’s Alexa virtual personal assistant to help keep pharmacy patients up to date on their medications. They are the first pharmacy retailer to offer the new medication management capability with Alexa.

The process appears to be straightforward, the article explains. “Under a collaboration with Amazon and medication management specialist Omnicell, Giant Eagle pharmacies now allow patients to set medication reminders and request prescription drug refills through Alexa. Users simply speak to an Amazon Echo device by saying ‘Alexa, manage my medication’ or “’lexa, refill my prescriptions,”’and the request is met using the patient’s prescription information at their designated Giant Eagle pharmacy.”

Aside from the associated convenience, the program’s objectives include helping people avoid non-adherence to prescription dosage plans (a major issue for some resulting in negative health care outcomes) and to simplify the refilling process.

“Integrating with Amazon Alexa makes it possible for patients to manage their medications by simply using voice, providing greater independence for older adults and the ultimate convenient, frictionless patient experience for everyone,” said Danny Sanchez, Vice President and General Manager of population health solutions at Omnicell.

Another example of how innovation and process improvement can enable grocery chains to enhance customer service and improve the supermarket shopping experience.