Have grocers figured out how to successfully do business online?
The recent announcement that Amazon.com will acquire Whole Foods has led to speculation about what the deal may mean for the future of grocery shopping, particularly when it comes to online ordering. While some suggest the deal represents a game-changing event, it’s clear the move by retailers to online ordering had already picked up in recent years as chains expand click and collect services as well as home delivery. This has taken place even as some continue to question whether grocers can turn a profit selling online.
Meijer, which began a pilot program offering home delivery of groceries in the Detroit metro area last year via Shipt’s third-party service, was pleased enough with the results to expand it to the surrounding suburbs and Ann Arbor.
“Convenience is king to customers,” Meijer spokesperson Joe Hirshmugl told the Detroit Free Press. “We’re looking to give them ways to shop our stores in any way they want, whether it’s ordering online and picking up at the curb, walking into the stores — and now, home delivery.”
Speaking last month on last month’s earnings call, Kroger CEO Rodney McMullen said customers using its in-house ClickList and Harris Teeter ExpressLane click and collect services were driving incremental volume for the grocery giant. Kroger is also testing home deliveries through its ClickList system that has deliveries made by Uber.
Mr. McMullen said Kroger was building its infrastructure “to be able to serve the customer the way they want to be served.” While emphasizing the important role that physical stores continue to play, he said the business is “the sum of all parts” and not just one segment.
Wegmans recently began a test to offer home deliveries of groceries using Instacart in Maryland and Northern Virginia. The family-owned chain plans to expand the service to stores in the Boston area as well as New Jersey and Pennsylvania.
“We continue to evaluate additional markets for the service, however, further expansion depends on customer demand, as well as an Instacart presence,” Michele Mehaffy, a spokesperson for Wegmans, told The Buffalo News.
- How Uber-like grocery services are changing retail – Detroit Free Press
- Kroger’s CEO Rodney McMullen on Q1 2017 Results (Earnings Call Transcript) – Seeking Alpha
- Wegmans will roll out grocery delivery in some markets – The Buffalo News
- Will using Uber for home deliveries work for Kroger? – RetailWire
DISCUSSION QUESTIONS: Do you think grocers have finally figured out how to make online work as a part of their overall business? Do the same metrics apply to assessing success for online grocery as physical store grocery?