A recent “10 Items or Less” article posted by SupermarketNews identified steps taken by major food retailers that indicate the focus on e-shopping will continue to grow in 2017.
The article states that Wal-Mart Stores plans to have around 1,100 stores offering online grocery pickup this year, and that they are continuing with initiatives built around making fulfillment more versatile and/or efficient, such as offering discounts on online orders picked up in stores, and testing the idea of having store employees deliver orders to customer’s homes on their post-work commutes.
The piece goes on to report that Amazon said it was rolling out “Instant Pickup,” a free service offering its Prime members a curated selection of “daily essentials” available for pickup in two minutes or less. The service is available at five campus locations currently with plans to add more locations soon.
Even no-frills Aldi had issued a statement indicating it was getting into e-commerce for the first time through a partnership with Instacart in three cities.
“Our partnership with Instacart is another example of Aldi expanding our commitment to customer convenience and value,” Jason Hart, CEO of Aldi, said. “We know customers are looking for new ways to save time and money.”
As these new services are being rolled-out, it strikes me that supermarket chains will need to take an innovative approach to refining their work processes to reduce waste and cost.
See related article…about becoming more innovative.
The Seattle Times recently published an interesting and entertaining article, which referenced the announcement made late last year by Amazon.com regarding the launch of an experimental convenience store in downtown Seattle where customers could skip the checkout line.
While the concept was presented as futuristic and technologically innovative, a French retail chain, Monoprix, took issue with that depiction.
As the video showcased within the article explains (in a clever and somewhat humorous way), “Monoprix’s “Livraison à domicile +,” is their 10-year-old service that also allows shoppers skip the checkout lines – via a different form of innovation.
What’s old is new!
A recent SupermarketNews article reported that Wegmans is launching an e-commerce partnership with Instacart , which will enable online shopping and delivery at Wegmans Food Markets in select cities.
According to the article, the service will be available in Northern Virginia and Maryland, and will allow customers to order from Wegmans online and have their groceries delivered to them in as little as one hour.
A Wegmans spokesperson was quoted in the article as saying “it was offering the service to meet customer demand for time.”
This perspective is common as, in an effort to respond to consumer demand and competitive pressure, numerous food retailers have been striving to provide online offerings.
We expect the trend to continue as supermarket chains find new and innovative ways of maintaining customer loyalty.
While possibly making less of a splash than the Amazon-Whole Foods deal, Lindl US opened a new store in Virginia Beach, VA, signifying the beginning of what many have termed a new era in food retail.
According to a SupermarketNews article, hundreds of shoppers were waiting in a line that circled the parking lot early Thursday morning waiting for Lidl US to open the doors.
The big splash and anticipated disruption to the industry may be based on a number of factors, two of which truly stand out:
- Lindl US is committed to offering the lowest prices. “We will beat the best prices in the market,” Brendan Proctor, CEO says.
- Lindl US is basing decisions on the voice-of-the-customer. “It’s not about whether our model works in a market,” Proctor said during an interview. “It’s about what we have to do to adapt to the market.”
As they say, time will tell…
A number of presentations at this year’s NRA Show in Chicago focused on how supermarkets and c-stores can build on some key elements of restaurant design to create a dining experience customers will seek out.
In other words, the combination of upscale design and finer dining options can be leveraged to make a supermarket or c-store a destination where customers feel welcome to stay, dine and enjoy.
“Consumers care about what the experience is like, and 90% of the information sent to the brain is visual,” Tré Musco of Tesser, a brand strategy design firm, said. “People form judgments instantaneously. In terms of design, perception is reality.”
But Tre Musco and other presenters also noted that, if a store is to become a place to enjoy a meal, customers must perceive it as such.
Some of the steps retailers will need to take in order to accomplish this include:
- Lead with change… go beyond just “adding a few tables and chairs” and create a warm, comfortable, and alluring dining area.
- Pay attention to details… such as food displays, lighting, and even restrooms. “Restrooms really matter,” Musco said. “Customers 100% judge your freshness and cleanliness on your restrooms.”
Read the full article…
A recent Reuters article focused on “low cost” grocery leaders, noting that the German grocery chain Aldi Inc is trying to outdo the world’s biggest retailer (Walmart).
Aldi currently boasts 1,600 U.S. stores, but only accounts for about 1.5 % of the U.S. market. A company spokesperson referenced in the article says Aldi is growing at 15% per year and plans to open 400 new locations by the end of next year; he also said Aldi’s prices are 21 % lower than its lowest-priced competitors.
Walmart, on the other hand, currently controls about 22 % of the market and its U.S. sales are estimated to grow about 2 % this year, according to analysts; and, of course, Amazon continues to grow Amazon Fresh while feverishly testing brick-and-mortar stores.
At the same time, in a race based on customer satisfaction and shopping experience, MediaPost reported the results of a Top Grocer’s survey done by Market Force, a market research company based in Louisville, Colorado. Their customer loyalty index is based on responses from some 12,700 consumers, the article said, and the top slots were awarded to:
- Wegmans and Publix (tie for 1st)
- Trader Joe’s
Ironically, Walmart came in last in the Market Force survey… which makes one realize that price does not necessarily guarantee customer loyalty.
As you most likely are aware, Instacart provides shopping and home delivery in a variety of stores.
In an ongoing effort to generate more precise shopping trips — i.e., a faster way of shopping for its employees, who are shopping on behalf of customers — the San Francisco-based company has been testing various ways to determine how people might most efficiently shop for items on a list, ranging from:
- an alphabetical list
- a route-based approach
- an artificial intelligence (AI) approach that uses data from the company’s most efficient shoppers to predict a sequence of picks that would be the most efficient
The article states that people are using AI to solve hard problems more and more… and the algorithms used for more traditional problem solving are not so different from those that can determine how a human would pick-up specified items in a store. In fact, Instacart is able to “guess” the next item a shopper will pick 60% of the time with the AI solution!
“It’s not 95%,” said Jeremy Stanley, VP of data science at Instacart. “But there’s room for variance and error. When we look at the overall sequence it mimics what the shopper does very closely, and usually only reverses a few items per trip.”
Might there be an application for using this AI approach for you and me to enhance our food shopping experience?
If so, how might retailers view this developing use of technology, considering it might make shoppers less susceptible to impulse buying because they will do less wandering through the aisles?
“The U.S. food retailing business has never been more competitive, the article said. “A number of trends are putting pressure on food retailers of all stripes…”
The article went on to suggest that the food retail business is evolving and “the customer is king!” Data from a study done by Packaged Facts was also shared, identifying three key trends as “shaping” the food and beverage retail market:
- The incursion of e-commerce onto the food retailing landscape
- The evolution and expansion of contactless payment options
- The rise of the smaller store formats
Read the full article…
According to the article, for a growing number of consumers it is simply not enough to provide competitive pricing, selection, and convenience. Instead, the article suggests, individuals are now seeking “memories” when shopping, which can come in the form of in-store education, additional services, entertainment, or other offerings that engage shoppers.
To simplify the planning process, it is recommended that supermarkets focus on four “quadrants” to enhance the shopping experience:
• Entertainment. Live engagement with shoppers — such as cooking and pairing demonstrations, as well as wine and beer samplings.
• Education. Examples of this could include in-store cooking classes, “stories” behind the sourcing and production of products, and meal ideas.
• Esthetic. (spelled with an “e”) In-store amenities such as restaurants, wine bars, and cafés.
• Escapism. Tasting new cuisine and flavors can mentally whisk shoppers off to new locales or inspire them to experiment with new ingredients.
Read the full article…