Photos: Publix
Can the Publix customer service experience be brought online?
Through a special arrangement, presented here for discussion is an excerpt of a current article from Frozen & Refrigerated Buyer magazine.
As it moves into an increasingly digital future, how will Publix translate its stellar in-store experience fueled by highly motivated, well-trained associates into a positive online experience?
One thing’s for sure, it’s not gonna be easy.
Why? Publix continues to roll out its partnership with Instacart to provide home delivery of online orders, completely eliminating any contact with store associates — the biggest thing that makes the chain stand out. Same-day delivery is set to reach all markets by 2020.
As a result, “Shopping online at Publix has been reduced to a more expensive alternative to shopping online at Walmart or Kroger,” contends Don Stuart, managing director at Cadent Consulting Group.
“It’s definitely not a long-term solution,” agrees another source close to the company, who believes the chain is still evaluating its options. In order to ensure an excellent experience, “The person who brings the order that last mile to the customer’s door should be a Publix associate. That’s part of the brand and shouldn’t be farmed out.”
Beyond treating workers well, being employee-owned has helped create a knowledgeable, enthusiastic workforce that can be witnessed in Publix’s clean stores, short checkout lines, personal assistance locating products and help carrying groceries to your car. Ken Morris, principal at BRP Consulting, said the combination has created a “cult-like loyalty” among Publix shoppers.
Beyond employee interaction, says Hayley Howard, manager of business analytics at Cadent, “The company absolutely needs to find ways to personalize the online shopping experience or add value somehow in order to differentiate itself from other retailers.” Because right now, she says, its e-commerce program is, at best, middle-of-the-pack.
Publix differs from much of the industry by not offering a conventional loyalty card on the belief that it wants to offer the best deals for everyone. Those providing their phone number at checkout can receive digital coupons tailored to their purchases as well as e-receipts and “sneak peaks.” Explains director of media and community relations Maria Brous, “Our goal is to meet our customers where they are. And for many, that’s online.”
Discussion Questions
DISCUSSION QUESTIONS: Are there ways for Publix to effectively extend the elite customer service found at its stores to the online experience? Does the lack of a conventional loyalty program hurt its positioning online?
Poll
BrainTrust
Susan O'Neal
General Manager, Promo Intel & Insights, Numerator
Dave Bruno
Director, Retail Market Insights, Aptos
There are two very different questions posed by this article. The first, “are there ways for Publix to effectively extend the elite customer service found at its stores to the online experience?” – absolutely. In fact, online is really “in-home” … where real human, interpersonal connections are more important than in-store. Regarding the second question about whether Publix’s lack of a “conventional loyalty program” hurts their online positioning – absolutely not. In fact, I’d say that while other retailers have confused reward systems with “loyalty” Publix has remained focused on what creates real loyalty in people – enjoyable (“pleasurable”) experiences, consistently delivered over time, person to person. There is a real risk that an attempt to translate that kind of loyalty into technology terms will change the nature of it, along with real opportunity to enhance their quality of service across different touch points. The net takeaway – real loyalty is a complex, delicate, HUMAN thing and if I were to start somewhere, I’d rather be at Publix’s starting point than just about any other.
I agree Susan. Publix is one of the few retailers that understands that loyalty programs do not create loyalty. The true loyalty drivers are what Publix has built its business on — clean stores, checkout lines, friendly associates, etc. Those are the things that make customers feel respected and cared for and you can’t replace that with a card.
That said, I absolutely think that some type of loyalty program is crucial to Publix establishing the same kind of customer relationship online as they do in-store.
Publix can create a program that is not about incentive, but all about serving the customer. Instead of requiring a card for discounts, Publix can simply offer additional rewards or services to their better customers. One of those services is using their individual purchase history to make shopping online much easier.
Their existing digital coupons program is a step in the right direction but, from what I can see, the customer utilization is still fairly low. If they can get more customers to self-identify themselves when they shop the physical store, they can leverage that data to make it easier for the customer to shop online. Along the way, they can also use the data to help customers save in their physical stores.
Publix is in a great position because they know how to serve their customers. A loyalty program can help them extend that level of service online.
It seems pretty obvious that shared online shopping via Instacart cannot be a long term solution for Publix because it minimizes their customer service strength with a generic interface and offering. My guess is they know that already and are working to correct it.
As for a “loyalty” program I really wish we would stop calling shopper history programs that because as others have pointed out, they really aren’t. Knowing what your customers buy can fuel powerful customer service initiatives (in-store and online) helping a retailer tailor offerings to individuals and making it far easier for customers to buy from them.
Many shoppers move between chains effortlessly based on their weekly shopping needs and chain specials. Understanding what an individual shopper is likely to be looking for in a particular week and communicating to them when your store has that item featured can be a powerful motivator for them to shop that store during the week.
And if you do that every week, consistently matching your specials to their needs, it won’t necessarily create loyalty but almost certainly will encourage them to adopt a default position of making sure they review your offerings each week. And that is a start.
(Love the phrase “shopper history program”). Only one point I might disagree with — the high-low pricing strategy (a necessary defense against Walmart EDLP, et. al) has exacerbated the consumer behavior of moving between chains and shopping the TPRs – but I wouldn’t call it effortless for the consumer. Honestly, it really stinks for the consumer (very very few consumers actually want to shop multiple stores for their groceries, especially for working parents). Robinson Patman legacy + growth of Shopper Marketing dollars make it hard for a smaller or regional retailer to compete any other way, but that doesn’t make it the best thing for consumers.
Completely agree Ken, Publix customers need a reason to self-identify consistently across touch points and transactions that they don’t have today. To stay consistent with their brand (and protect the great relationships they have), that reason (to self-identify) has to be something greater than discounts, or even temporary price reductions – in essence a value proposition evolved beyond discounts. As home delivery of grocery grows both in frequency of order and overall HH penetration, the trust Publix has built up through their employees could be a big part of the equation.
This is the same concern all great retailers have as they shift from traditional brick-and-mortar stores to a digital presence. Nordstrom had the same concerns about keeping their reputation for amazing service through new – and less human – channels. All retailers, including Publix, must understand their customers’ expectations on different channels. There will be differences between in-person and digital. For example, if I call a store with a question and I’m put on hold for a minute, that may be acceptable. I expect that someone will pick up the phone quickly and give me the information I am looking for. If I’m on hold for 10 minutes, they may have exceeded the boundaries of my acceptable expectation. If I email the same question, I am not going to expect an answer in under a minute. I might be very happy if they get back to me in an hour. The expectations between phone and email are different, but the outcome of how the I feel about the experience must be the same. The key is to know the customers’ expectations on the different channels and meet or exceed them.
The last mile, including the final delivery by a Publix or non-Publix employee is not important. The key is on-time delivery, and the online customer experience. There are certain brands, how they are available, and what it means to be part of the experiential Publix family that must be captured in the Publix online environment. This is the key, not who delivers the product. Part of the experience includes full 360 degree feedback and super Publix customer service. Sustaining these and growing their online presence are all critical for Publix in the online world.
Warning! Warning! Instacart is not the long-term answer if Publix hopes to maintain their experience advantage! If Publix’s deployment of Instacart is an indicator of how they will outsource other elements of the online experience, I see trouble ahead…
I do too, Dave. The simply outstanding Publix experience needs to be consistent across channels, and that’s not going to be easy to do.
For Publix, extending its brand to digital channels is really about delivering convenience to its customers. Just because the person delivering the groceries to a customer is an Instacart employee, doesn’t mean the customer forgets they placed this order with Publix. Sometimes we over-analyze brand relationships and in this case, we risk doing just that. Publix customers have such strong loyalty to the brand, I doubt their loyalties will shift away just because they see an Instacart logo deliver their groceries. If anything, this will cause those customers to appreciate their in-store visits even more next time they visit a Publix store. The real issue for Publix is how they go beyond this effort to further enhance their brand relationship. Offering curbside pickup where a Publix associate brings the groceries to the customer’s car is one way. Even if leveraging Instacart’s platform to do this, it can be done in a way that reinforces the Publix brand. And that’s just a beginning!
Regrettably I am all too often much happier with the delivery service than the box and/or what is in it. If a company wishes to be successful in e-commerce, the endeavor begins with understanding what the customer would put in their basket after the selection process has taken place. Issues like whether it looks new with an undamaged packaging will determine whether or not follow-on purchases happen. For now focus on the purchase experience.
One other issue with not having a loyalty program is the lack of customer data that can be applied to track, measure, and improve customer experience and sales. Especially in a digital environment.
I believe as others today have mentioned that Publix employees need to deliver the last mile. The experience at Publix today is enhanced by associates interaction with customers. Today they help people to their cars with their order every time, they do things like offer free cookies and balloons to children. Instacart employees will not be offering those brand enhancing experience. I do feel that they need to create a loyalty program as they will be playing catch up, but not for long. Their winning combination will extend to the online shopper very quickly.
Publix’s decision to retain Instacart is not a surprise. They, more than anyone, recognize their reputation as an elite provider of service is more myth than reality.