Publix is Back Online

My first reaction to this was "With a Publix every 20 blocks (really!) and with the good levels of customer service they have in the stores, why would the company need this?"

But there are occasions when it really would be good. Moms with kids wanting everything they see, research analysts who are too lazy to put their products into carts...it kinda sorta makes sense.

I will say this (Publix take note!)...I'd pay the $7.99 to avoid putting my stuff onto the checkout belt. In other words, I'd do the shopping, get to the register, and then have someone else do the rest.

Paula Rosenblum, Managing Partner, RSR Research

This appears to be an added service that requires minimal capital. Publix doesn't have much to lose. I doubt it will be very successful, however I think they will keep it as an added convenience. Just like adding a sushi bar, nice to have but the line is never long. If MyWebGrocer is doing all the tech work, Publix's risk is minimal.

David Livingston, Principal, DJL Research

It solves the "last mile" problem and I'm sure it will appeal to a segment of customers. The question is, will that segment be large enough to sustain the program and the honest answer is, we'll have to wait and see.

But, if I was going to hazard a guess, my guess would be that it won't work because demand won't be significant enough. But, who knows?

Ryan Mathews, Founder, ceo, Black Monk Consulting

I like this idea and the $7.99 price tag is not out of scope, especially for busy consumers. It's right to target busy moms, but as a busy boomer, this would work well for my lifestyle as well.

I am imagining myself back in Charleston, SC, working remotely from a condo out on Wild Dunes. When I can take a break, I'm choosing a bike ride, a beach walk or 9 holes of golf. There's a great Publix store nearby, where I will pull up and pick up my grocery order for the week after ordering online from my iPhone. Does it make sense to pay $8 to allocate the 60 minutes I would have spent in the store to an activity that is healthy, stress-reducing and fun? YES indeed it does.

I hope Publix uses shopper segmentation scenarios to communicate the message appropriately to the variety of shoppers it has in its geography.

Anne Howe, Founder, Anne Howe Associates

I think the timing on this is better than their first venture.

Through the late '90s and early 2000s there was a gold rush of sorts toward delivered and installed products, citing an aging and time compressed consumer segment but in hindsight, I think it was about 10 years too early.

With over half of baby boomers now over 55, it's entirely possible that home delivery could pick up some steam over the next 10-20 years as driving becomes less desirable among the cohort.

Doug Stephens, President, Retail Prophet

Didn't we recently comment on the return of the milk man? Although that did not seem to make as much sense as this. For the weekly (fruit, milk, cheese, bread, steak, chicken and such items), this service makes great sense.

Mark Johnson, President and CEO, Loyalty 360

An army of Publix shoppers, particularly in Florida, are older shoppers. While getting about might be troublesome for them it might easily be assumed that they see going to Publix as their "day on the town" and that shouldn't be underestimated.

Home Direct and Publix Curbside are both fine customer services for their niches but they are still lesser than being among other live folks if you're a bit long in the tooth. Publix doesn't have to expect very much from Publix Curbside in that it will further enhance their reputation for good customers service, and Publix thrives on that.

Gene Hoffman, President/CEO, Corporate Strategies International

As David said, this involves only a small investment and minimal risk. It should work well enough to keep it going, given busy lifestyles. Not a home run, but definitely a stand-up double.

Warren Thayer, Editor & Managing Partner, Frozen & Dairy Buyer

This move is the right one for Publix. Site to store programs are gaining momentum in many parts of the country. It saves time--just pay and go. Searching through the store, especially with heavy items like soft drinks and laundry products on the cart is not something most shoppers look forward to.

Retailers like Publix are in a great position to keep their shoppers coming back. Most households buy the same 300 or so SKUs weekly to cover the basics and preferred brands. Making the stock-up trip for routine purchases a quick pickup will be an easy habit to develop. Shoppers may still want to shop the fresh produce, meat and deli areas, but that is a lot faster than loading in all the bulky and heavy items.

For Publix, picking and packing can be done efficiently, and with less in-store labor. Some supermarkets are offering online only larger packages of canned items, paper goods, etc, that are better value. These cases are too bulky for the trade floor and awkward for the shopper to handle--now made convenient by loading directly into the car. More services to add value can be being developed here. Look for this program to expand.

Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

This is a good experiment for "the last mile." However, what was the impetus for the experiment? Yes, consumers are busy but is this the issue (too hectic or difficult to get from the car to the store, through the store and back) that arose from a significant number of consumers when talking with them? If so, the experiment is a great solution to test. If the idea came from what managers think consumers want, then it is anyone's guess whether there will be sufficient demand.

Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

Online grocery shopping faces three hurdles which other retail categories do not: critical cold chain requirements, the perishable nature of "fresh" products and extremely low gross margins. Curbside pickup has the potential to address the cold chain issue. Customers may still have to be convinced to let someone else select their peaches. But the low gross margins will continue to be a challenge.

When full-service grocery stores converted to self-service supermarkets, it was a win/win for both retailers and customers. There was a significant increase in sales as operating and labor costs were spread across many more transactions and products. Customers got much wider selections and were able to speed their way through the markets. In essence, online grocery shopping brings us full circle by putting the cost of assembling the customer order back on the retailer. While the online catalog might expand consumer selections, it is unlikely it will ever make up for the handling costs. This means retailers will need to continue to charge a service fee or higher retail for online orders and consumers must see benefit to the added costs. The alternative is to use online shopping as a loss leader...not a good long-term perspective.

This is not all bad. The Publix employee who described the online shopper as the mom with three kids picked the perfect example of someone for whom the service fees make sense. These are also the shoppers who will be back each week. The mistake is to ever hope that online shopping will be the preferred method for everyone.

Bill Bittner, Principal, BWH Consulting

Publix is extending the fantastic service they already provide with a new outlet while minimizing the costs associated with their previous venture. Their point of the busy mom with kids that run around is a good one; this will no doubt save many customers time and energy. Though lines aren't usually long, they peak at certain times of the day where customers are picking up last minute items for dinner that night. This will certainly assist here, but there is a problem: no impulse sales.

The online checkout won't feature cold soda, candy, magazines, batteries, and all of the other items that consumers will easily add to their purchases. And with no kids running around asking for another box of cereal, cookies or other snacks, those incremental buys could fall. This is the biggest challenge to this service and it will be interesting to see how this affects their sales and strategies.

Matt Hahn, Planning Manager, Walt Disney Parks & Resorts

Publix is taking a smart approach to offering a quick and convenient solution for today's insanely busy shopper without the extraneous overhead and insurance costs of the delivery fleet. It also appears they are testing and learning their way into it, starting with high income neighborhoods and defining how high is up in terms of their convenience fees.

Publix would be wise to build this offering with the best of mobile shopper marketing tactics such as phone apps, targeted offers to drive trips and trade up to make the most of this convenience solution. Curbside pickup was a category killer for the drug channel that already suffers from a lack of basket building front-end purchases. The story can end differently for food, which can leverage the convenience factor as a trip builder and one that may have been lost to the quick service restaurant across the street.

Alison Chaltas, EVP, GfK Interscope

Two immediate questions spring to mind -

How long will the picked and packed order sit around waiting for customers to collect?

How long will customers sit around waiting for orders to be picked and packed?

Bernice Hurst, Contributing Editor, RetailWire

Publix experimenting with online ordering and curbside pickups is another interesting attempt to make shopping easier and come up with new ways to distract the competition.

An earlier comment asked how long the orders might be waiting for the customer to pick up and how long would the customer wait for the order to be picked? Those are interesting questions. Both need to be addressed. I don't want my ice cream to be milk by the time I arrive home, do you?

Another question I might throw in the mix is how patient are the regular customers going to be when the curbside is blocked by cars waiting for orders.

I believe every good idea should be tested, and every great idea put into practice. I see this as a good idea that will be tested and shelved before the end of the year.

Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

Online shopping is increasing in all categories. The challenges in the past with online food retailing have been mitigated in many cases. Other organizations are making this work, and the audience (busy young people, aging boomers, etc.) is growing in size and desire for this in our ever-increasing service-oriented consumer world.

Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

Publix beware. This is a great offering, not only for that busy mom with three kids, but for ANYBODY who has something better to do than walk up and down grocery aisles. Yes, Publix, you can train your shoppers to order online, a process that becomes very, very easy. The shopper can even one-click on items bought regularly without thought.

But, as the shoppers are trained with the ease of online grocery shopping is Publix preparing them to the next logical step? Doesn't the question hang out there, "as long as I have ordered online, why can't I just have the groceries delivered?"

There will be companies that develop viable business models for grocery delivery in high density suburbs. Fresh Direct has moved into Westchester and Fairfield counties. More are coming. Be assured, Publix is reconsidering Publix Direct.

In the name of full disclosure: I live in Manhattan. There is a D'Agostino's across the street. There is a Food Emporium two short blocks north (less than 100 yards). There is another D'Ags 4 short blocks south. The vast bulk of our grocery purchases are done with Fresh Direct. There is little or no reason for my wife or me to even cross the street to make a regular shopping trip.

Gene Detroyer, Professor, Entrepreneur, Adviser, Consultant, Independent

Publix's new online ordering concept is hardly a revolution. It merely reflects the spectrum of service options that shoppers have learned to expect today. I foresee an evening rush at the pick-up lanes where working moms queue up for their orders on their way home.

As others here observe, online ordering with curbside pickup is a whole 'nother animal compared with solutions incorporating home delivery. For delivery schemes, the "cold chain" issue raised above is just one complication. There are also the challenges of managing multi-stop routes, fleet and fuel costs, delivery appointments, and unattended home access.

Cold (and hot) temperatures are less difficult to control in a store pickup scenario. The store must simply provide an appropriate holding area for orders. Also the online shopping list, cart and payment methodologies are well established now, with mobile device integration already available "off the shelf" to retailers who want to provide this option.

Of course, Publix knows all of this from its prior experience, so we may infer it is making prudent choices in designing its new offering. For me, this seems like a very easy call. Even if less than 5% of orders are picked up this way, the costs and risks are low and the shopper receives a desired service advantage. I predict success.

James Tenser, Principal, VSN Strategies

Given that Publix is concentrated in a geographic region (Florida) where there are many retirees and an aging population, the service may appeal as much to older folks seeking convenience and service as the busy Moms mentioned by others.

I agree with others that the risk/reward equation is in favor of Publix here and they do need to differentiate with service as they being confronted with price competition from Walmart in Florida.

Bill Hanifin, Managing Director, Hanifin Loyalty LLC

Offering consumers the ability to order ahead of time, and then stop on their way home AND get curbside service is a real convenience that many consumers will like.

Odonna Mathews, President, Odonna Mathews Consulting