Grocery Sites Say Compare and Save
By George Anderson
For Joann Gage’s sake, we hope this isn’t a case of famous last words.
Ms. Gage, vice president for advertising and marketing at the struggling Winn-Dixie supermarket chain, doesn’t expect that new comparison-shopping sites for groceries, such as www.cairo.com or www.shoplocal.com, will have much of an impact on the day-to-day business of companies such as hers.
She told The Miami Herald, “It’s something people can go to as a tool, but I don’t think they would use it day in and day out. It seems like it would be easier to look at the hard copies of the ads or go online to the individual sites.”
Andy Moss, founder and CEO of the cairo.com Web site, is betting that Ms. Gage is wrong.
‘We’re positioning ourselves as the place to go online to help you shop offline,’ he said.
“What we’re trying to do is deliver that savings back into the consumer’s pocket. We want to help them know when it’s a good deal and it’s time to buy,” he added.
Consumers can go to the Cairo site and type in their ZIP Code to do a search for a specific item in the same manner they would use other search engines. Grocery shoppers can either type in a broad category of products for more results or drill down to a specific brand.
“It’s a real time saver for people,” said Melissa Severin, a spokesperson for ShopLocal. “Most people don’t have time to run around to multiple grocery stores.”
The services are not developed to get customers a price on everything on their shopping list, say Cairo and ShopLocal, but they will include all advertised product prices.
“For a price-conscious consumer, it’s a great tool,” said Chuck Gilmer, editor of the Shelby Report. “If you can go to one spot and get all the circulars, it has a lot of advantages.”
Moderator’s Comment: How will technology used by consumers, online and off, impact pricing at grocery in the near future and in the longer term?
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George Anderson – Moderator
I’m inclined to agree that comparison sites are more convenient for other retailers (who may appreciate not having to trawl around the real stores to compare prices) than consumers but where they might be helpful to the latter is when the retailers bring their prices more in line with one another. I don’t expect many individuals will waste much time checking out a load of individual prices online and then going to lots of different shops to save a few pennies here and there. Especially if driving the extra distance costs more than what they might save. Not a great idea; I can’t see much of a long, or even short, term future in this one.
I’m not sure consumers will take the time to visit a site to compare prices, at least for most categories. For most shoppers, loyalty to a particular store, and the programs retailers put in place to encourage repeat visits, should have a greater impact on shopping behavior.
For some categories, however, these types of sites can absolutely impact consumer behavior. Gasoline prices, for example, reached new highs this week according to the U.S. Energy Information Administration (EIA). Prices jumped 10.2 cents last week to reach a record 232.8 cents per gallon as of July 11 — nearly a nickel more than the previous record of 228.0 cents per gallon reached on April 11. Would consumers surf to find the best deal on gas when it takes $40-60 to fill up a tank? I believe so, and pick up the groceries when they’re finished.
I know Cairo and the others out there but simply don’t see any of these having much of an impact (their getting enough eyeballs this late in the game aside). Product search is key — when e-commerce is involved or a high-end, occasional considered purchase is taken into account. But for grocery? It’s too much work to cherry-pick a pack of bologna or a rib-eye. Cairo should stay away from food and drug and focus on categories where considered purchasing matters more.
I could see a savvy shopper using a site like Cairo.com or Shoplocal.com to hunt for the weekend’s best deal on a key, high-ticket item – like steaks for a summer grill party. But as a practical matter, these sites are useless for comparing market basket prices. You’d have to look up items one at a time.
They are potentially useful for local supermarket managers who want an efficient way to monitor competitors’ deal prices, but only IF the price information is shown over time to be complete, accurate and timely.
A smart application-builder could develop a tool that automatically searches those sites each day and develops competitive reports for local store managers… Hmmm. Better call my patent lawyer…
I agree with the above comments — for now, at least, the sites are too cumbersome to bother with. Doing a search on Cairo led me to a store that is “only” 16 miles away. But, the site isn’t sophisticated enough to realize it’s about 50 miles away unless you have the ability to drive over water (Long Island Sound). Neither site had a lot of food items — searching on “Kraft cheese,” “Hellmann’s mayonnaise” and “Folger’s coffee” returned 0 results on one of them. And, recommendations for specials on food items on ShopLocal sent me to Walgreens. Even though Walgreens has improved their food offerings, it’s hard to believe anyone is going to seek them out via the ‘net to save a few cents on groceries.
I really don’t get it. Wal-Mart is the cheapest. I think most consumers realize that. Maybe some other stores will have some cheaper prices on some select items, but for the most part, if you are comparing prices, there is no point in looking beyond Wal-Mart. Either you are loyal to your grocer or you shop at Wal-Mart. I just can’t picture someone cherry picking among the chains, not is this day and age.
There is one possibility for significant impact from these sites: More paranoid retailers viewing them to make sure they are showing the lowest price to consumers — then making even more bad pricing decisions.
Ben’s comment is correct, and actually had me laughing out loud. Glad that Joann Gage and Winn-Dixie are smart enough not to be worried. These are a great service for high-ticket items, but as for surfing the site to find the best price on Dannon yogurt and Cheerios, I just don’t see it happening.
Since I had not heard of cairo.com until this story hit my Inbox today, I thought I should check it out before offering a comment … so I checked it out, and I’m impressed! While some may say I’m easily impressed, I can’t help but marvel at the continued progress toward real-time availability of information and aggregation of vast sources/amounts of data. This can be very useful!
Since I’m NOT the primary shopper in our household, I’m not likely to become a regular user of cairo.com … and since my wife (the primary shopper) is NOT the primary computer geek in our household, I don’t see her becoming a regular user either. However, when (or if?) the roles of primary shopper and primary computer geek are sufficiently aligned, who knows … sure seems like a step closer to creating the intelligent, highly optimized “shopping list”. They just need to add a ‘hot link’ that shows the aisle, shelf, and position of each item, so I can find it in the store … AND provide a “triple your money” guarantee that the item will be in stock, so I can actually buy it when I get to the store!
Comparison shopping will be more important for high involvement and relative expensive product categories. Grocery shopping for the most of us is a weekly chore and consumers are conditioned to visiting their regular store each weekend. It seems far fetched to me that a consumer would buy yogurt at one store and drive a few miles to buy their tomatoes.