Publix is Back Online

Discussion
Aug 10, 2010

By George Anderson

When Publix announced the decision to close its PublixDirect
online grocery and home delivery service in August 2003, just two years after
the service launched, then CEO Charlie Jenkins Jr. said, "Despite many
loyal customers and dedicated associates, PublixDirect simply didn’t have enough
volume to continue this service."

Now, the grocery chain is back with a
test of an online grocery service, but this one will only include curbside
pickup.

"As we continue to provide our customers with the service they have
grown to expect, we need to provide new and more advanced ways to meet the
needs of their growing and changing families," said Maria Brous, director
of media and community relations of Publix, in a press release. "Publix
Curbside is a natural extension of our service commitment, especially for time-starved
families."

The new service, which will be tested first in a store in
the Atlanta market and then another in Tampa later this year, charges a $7.99
service fee after the first order, which is free.

"It is appealing to the mom with three kids all running in different
directions," Brenda
Reid, a spokesperson for the chain told The Atlanta Journal-Constitution. "It’s
a sign of the times. We’re all extremely busy and trying to cut corners
to gain a piece of life back."

Discussion Question: Will Publix Curbside be successful where PublixDirect
was not?

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20 Comments on "Publix is Back Online"


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Paula Rosenblum
Guest
10 years 9 months ago

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.

David Livingston
Guest
10 years 9 months ago

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.

Ryan Mathews
Guest
10 years 9 months ago

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?

Anne Howe
Guest
10 years 9 months ago

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.

Doug Stephens
Guest
Doug Stephens
10 years 9 months ago

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.

Mark Johnson
Guest
Mark Johnson
10 years 9 months ago

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.

Gene Hoffman
Guest
Gene Hoffman
10 years 9 months ago

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.

Warren Thayer
Guest
10 years 9 months ago

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.

Anne Bieler
Guest
Anne Bieler
10 years 9 months ago
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… Read more »
Camille P. Schuster, Ph.D.
Guest
10 years 9 months ago

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.

Bill Bittner
Guest
Bill Bittner
10 years 9 months ago
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… Read more »
Matt Hahn
Guest
Matt Hahn
10 years 9 months ago

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.

Alison Chaltas
Guest
Alison Chaltas
10 years 9 months ago

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.

Bernice Hurst
Guest
10 years 9 months ago

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?

Ed Rosenbaum
Guest
10 years 9 months ago

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.

Ralph Jacobson
Guest
10 years 9 months ago

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.

Gene Detroyer
Guest
10 years 9 months ago
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… Read more »
James Tenser
Guest
10 years 9 months ago
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… Read more »
Bill Hanifin
Guest
10 years 9 months ago

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.

Odonna Mathews
Guest
Odonna Mathews
10 years 8 months ago

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.

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