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[16 comments]

New drive-thru grocery concept gets rave reviews

May 2, 2014

A new drive-through grocery store, Zoomin Market in Olathe, KS, is getting a lot of love from locals.

The new concept, which bills itself as "the next big idea in grocery," lets consumers place orders around the clock and then pick up between 8:00 a.m. and 8:00 p.m. every day. Customers simply drive up, sign in on a touchscreen and their orders are brought out to their vehicle. There are no additional fees for the service beyond than the cost of the products.

The reviews on Facebook have been excellent from customers who have shopped at Zoomin Market since its grand opening on April 27. One customer wrote, "The experience was fantastic, everyone was super nice, the order was correct and I didn't pay more than I would at a conventional grocery store. This is every busy mom and dad's dream."

Another wrote, "When I got home I checked everything with my list online. Everything was there, all the expiration dates were at least a week out but most were way more and the produce was top notch. Nothing was damaged or broken, nothing squished or leaking. I literally got two weeks of groceries in five minutes and it usually takes me an 1.5 hours plus drive time to grocery shop. Everyone should try it!!!!"

[Image: Zoomin Market]

Zoomin Market was conceived by founders John Yerkes and Matt Rider in 2012. Mr. Yerkes, according to the company's site, comes from grocery background while Mr. Rider's expertise is in operations/logistics and process management.

Olathe, which has made a number of "Best Places to Live" lists, has a population roughly 125,000 people making it the fifth largest city in Kansas. It is located about 20 miles from downtown Kansas City.

Discussion Questions:

Does Zoomin Market sound like a concept that might have legs? What do you think will be the biggest challenges it will face if it adds more locations?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How likely do you think Zoomin Market is to succeed?

Comments:

I think the biggest challenge will be online, rather than logistics. "Drive" stores have been all the rage, particularly in France, and Walmart just announced that they're testing the concept as well. The issue isn't whether consumers will prefer to pick up their groceries rather than roam the aisles. It will be if they can find the items they want in the assortment, and if the site makes the assortment more "discoverable" - easy to inspire, so as to have a chance to build basket size.

One thing retailers testing this concept should be prepared for, though, is smaller basket sizes, more frequent trips. If they build their logistics (and store) model based on average basket sizes seen in the typical American shopping trip, they'll find that shopper behavior will change and their economics may change as a result. That, at least, is what European drive stores found.

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Nikki Baird, Managing Partner, RSR Research

If consumers can get good quality produce and meats, combined with a wide variety of items they regularly purchase, without membership or other fees, this could be a real winner. It saves time, which is a harried shopper's scarcest commodity. I'd like to see some traditional brokers in suburban areas offer this service.

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Max Goldberg, President, Max Goldberg & Associates

I believe the drive-thru grocery concept has legs. The operations side of drive-thru is well developed and almost completely transferable to the grocery business.

The biggest kicker has been/is the number of items a drive-thru operation can really handle and still be efficient. The QSR industry knows very well that customer satisfaction falls off a cliff for drive-thru if the wait time exceeds 45 seconds. It's impossible to take, pick, fill and transact a true "drive-thru" experience if the store offers more than a few dozen categories. Customer wait time would skyrocket.

Zoomin Markets is leveraging shoppers willingness to pre-order online to alleviate this. That's a relatively new phenomenon that circumvents the biggest hangup previous attempts at this concept struggled with.

The key though, is still to focus inventory and advertising on the 150 or so items that consumers buy regularly and do something different with the "long tail items" -- if you stock them at all.

Perhaps as Zoomin adds locations and volume they can set up a central commissary/warehouse that handles the "long tail" items for all retail outlets. This might mean customers would have to give a minimum order lead time IF their order contains these items -- but it might work.

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Ben Ball, Senior Vice President, Dechert-Hampe

It's going to be interesting to see how start-ups like Zoomin fare as Walmart gets serious about drive-through and click and collect. Walmart has a window of opportunity to train customers old and new on its ever-proliferating convenience options, but it will close fast.

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Carol Spieckerman, President, newmarketbuilders

As I wrote yesterday regarding Harris-Teeter and curb-side, it occurred to me that there really isn't a need for the supermarket at all...then today comes this discussion. The efficiency of the business model beats the standalone supermarket by miles.

Per yesterday's discussions, "The biggest finite issue we deal with today is time. Anything that saves time has great psychic value and often financial value. The one caveat is that the products must be available and ready to go. No queues. No waiting."

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Gene Detroyer, Professor, Independent

We know from our research that a majority of consumers do not like shopping in grocery stores, especially center store and especially young people (I refuse to call them Millennials anymore). They are also very receptive to online shopping in general and to grocery (especially center store) being purchased in that fashion as well.

Given the above, and given the fact that most traditional grocers know something like this will work but are waiting around for someone else to execute on the idea vs making it happen themselves, I believe this will work. First to market.

When will this become mass? Probably not for a long time, but you've got to start somewhere, and this is a good first step towards the modern grocery store -- which, IMO, will be a combo of the Zoomin idea and a great experience in-store, not just one or the other. Let's get it going!

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Lee Peterson, EVP Creative Services, WD Partners

This concept absolutely has legs and is a great time saver for the consumer. The difficulty I see is that it will drive down the average basket for grocers. How does the consumer purchase the impulse items or notice the new flavor of Pepperidge Farm Goldfish to try?

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Robert DiPietro, GVP Product Strategy & Business Development, Affinion Group

Zoomin Market not only have legs, it's disruptive on the level of Netflix, RedBox and Amazon.com. I mentioned in the previous article on curbside pickup what need to be established is what Zoomin is offering. I have written a paper on this concept years ago as the model template for high-density urban retailing and know how disruptive this model is.

If a grocery retailer wants to wait:

Wait until the shoppers get used to scanning UPC code of products with their mobile phone and adding it to their online basket to pick up later. These UPC scans inform Zoomin what products are in demand and to make sure it is in stock.

Wait until Zoomin create an app for X-Box, Playstation, car computer platforms to connect to shopping list and add items for pickup.

Wait until Zoomin can extract from basket data and instantly recommend products and offers and social network interface allow people to chat on coupons and discounts.

Wait until the "smart refrigerators" sends an XML message to Zoomin API notifying 30 local household refrigerators ran out of mustard and to prepare an order of 30 units of mustard to prevent out-of-stocks.

I know this model very well, as it is a template I studied for years for high density urban markets; it's too disruptive for others to wait and see.

Ed Dunn, Founder, (Stealth Operation)

Swiss Farms has been executing a concept similar to this for years. The difference between this model and the ones we discussed in the forum yesterday is there is no additional "fee" for this service. As long as there's ordering ahead, a convenient physical pickup process, and pricing is competitive, it could have legs.

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Larry Negrich, Vice President, Marketing, nGage Labs

Just yesterday we discussed this very topic, although it had to do with how much the consumer would be willing to pay for this service versus the in-store experience or a full delivery type of service. In the end, if it is easier for the consumer to do business with you, and it endears them to you (making them more loyal to you), then do it.

This service is a very customer-focused. However, there is a cost. Questions to consider: Does it make financial sense to provide this? While it may cost more to provide this service, will it increase sales and loyalty?

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

Zoomin Market seems quite promising. It appears it has worked out the pickup process rather nicely. Much will depend upon the smooth functioning of the online/mobile ordering process, the assortment offered, competitive pricing and the reliable quality of perishables.

Economical sourcing will be a challenge, even as it adds its first few locations, since it will rely on deliveries from wholesalers and distributors. Since there is no in-store merchandising, DSD items like bread and soft drinks will require an alternative process compared with conventional stores, not to mention some kind of net pricing.

On the positive side of the equation, Zoomin Market may take advantage of less costly real estate, with a smaller store footprint, reduced parking requirements, and locations near traffic arteries, rather than crowded strip centers.

There is already good evidence that shoppers will avail themselves of curbside grocery pickup for some trips at conventional grocers around the country. Zoomin's "pure play" approach has potential to set the standard for the service experience.

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James Tenser, Principal, VSN Strategies

It's not so much "does it have legs?" as "does it have wheels?" I don't think so: it has the basic problem that any model that substitutes paid labor for customer labor has...it's going to either cost more (than an equivalent self-serve) or it isn't going to be profitable. Now maybe in Greenwich CT - or some other wealthy enclave - people will be willing to pay others to shop for them, but I doubt the fifth largest city in KS is such a place. (And as an historical note, this idea was tried in the 1920s.....how'd that work out?)

'notcom'

This might succeed because it is in a relatively small community. But the overall concept has been tried many times and has yet to take off. Too many shoppers prefer to walk the aisles and do their own selecting, especially in meats and produce...anything perishable.

Note to Tony Orlando...keep on doing what you are doing. The Zoomin Market concept is not a threat to home-grown businesses like yours.

For some reason this reminds me of the fast food drive thru lanes.

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

How has the industry NOT done this for the past decade or more?! Basic stuff, however, great execution.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

In Olathe, KS where people are tight for time, it has legs. In other markets where it's a novelty, yes too. For traditional shopping trips, get out of your car and shop!

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Jerry Gelsomino, Principal, FutureBest

The same challenges it would have at any location: That the produce (and similar) be fresh and that they would pick out and provide me with the same thing that I like to pick out myself. The biggest challenges I see would be to provide the same high level of service as they add more locations and get busier.

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Naomi K. Shapiro, Market Communications Manager, Upstream Commerce

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