Given the expected challenges in the economy and Amazon’s continued investment in grocery, it’s a good time to ask, “How well is Walmart positioned to maintain its leadership in US grocery, especially against a competitor like Amazon?” Here’s one way to view the dynamics between these two retail giants as they vie for grocery market share.
Shopper behavior is being impacted by the COVID crisis and the changes point toward the “new normal/reality” – but what should grocery retailers be doing to keep up with their customers? After reviewing a new report from the Retail Feedback Group that shows where and how supermarket shoppers have changed, we offer these emerging areas of key shopper needs along with ideas on how operators can effectively respond. (4 min read)
Amazon has continued to refine and strengthen its three-prong strategy to win in grocery despite the COVID-19 pandemic –albeit rather quietly. Since Amazon's execution of this strategy is looming on the horizon (as early as the second half of 2020), we think it is vital to offer: 1) a high-level description of what we see happening, and 2) the changes food retailers need to make in this inevitably more challenging and competitive environment.
Instok.org signals what could become a significant competitive differentiator for grocery retailers. The site enables shoppers to quickly find stores that are in-stock on the products they’re looking for. Big picture, this level of transparency could also serve as a business-builder for stores that maintain accurate current product availability on their sites – and a vulnerability for those that don’t.
The new Amazon Go Grocery store provides another piece of the puzzle that will eventually reveal the big picture of Amazon’s role in grocery. One clue to where it may fit is that Amazon says it’s a separate store format – not just a bigger version of Amazon Go. That means it’s designed and located to serve a different set of customer need states (i.e., shopping occasions).
Basics Market, the Portland, Oregon retailer is adding locations – so we visited to check in on how its very different approach to food retail is working. That approach? Basics wants its customers to think of it not as a grocery store, but as a place to get information, coaching, and the ability to create better meals. Here’s what we observed when we visited the original store and its new location recently (a third is scheduled to open in spring 2020). 3 min read
As Amazon's new grocery chain becomes closer to reality, it shows how
it’s competition in for grocery sales differs from Walmart’s. As a result,
supermarkets will be more vulnerable – and need to do a lot more work to prepare
for this next chapter. Here’s the big picture.
Choice Market in Denver, CO, is an example of how small food stores are innovating to get closer to their customers – and stay close. When CEO and Founder Mike Fogarty says its mission is to make “good food accessible and convenient,” he means “in every channel.” That ranges from in-store, online, via delivery – and in locations that aren’t being served by legacy food retailers.
A multi-faceted merchandising program implemented at Walmart by Avocados from Mexico is proving that combining digital touchpoints with in-store messaging can get consumers to reach out for information while they're shopping and grow category sales – especially when it's focused on something consumers want and need to know.
Food retailers are working hard to
balance their response to surging customer expectations with the need to
offset margin
pressure. Automation can help, and the best way to use it is to focus
first on reducing costs to help maintain margins and then use some or
all of those savings to fund efforts to meet emerging shopper needs.
The opening of the Alltown Fresh market in Plymouth, MA in Jan 2019 shows how smaller stores are going after consumer interest in prepared foods - and targeting well-defined pockets of customers with similar needs. It's a good example of how traditional retail channels are blurring, how food (especially prepared food) is where retailers see the action is, and why effective marketing is vital to success.
For decades there has been a strong complementary relationship between
large CPG brands and big food retailers which has helped to drive
growth, and it created a strong interdependency between them. There are,
however, increasing signs that this historically important relationship
is under strain as some of the large grocery chains continue to invest
in lowering their prices and have been particularly demanding as of late
on CPGs to help them do this. Here's how this could play out.
The team at Daisy Intelligence, a
software-as-service provider, focuses on making weekly promotions work more
profitably
for grocery retailers. So if the prospect of making a 5% or greater impact on total sales without investing additional margin is appealing, check out this Q&A with Daisy CEO Gary Saarenvirta. If not, please read it anyway because the rules of grocery retail are being changed by the likes of Amazon, Aldi, Kroger, and Walmart, and your survival requires sourcing additional growth in new ways. Here's a way to do that.
At the NGA show, Bill Bishop and Ken Ouimet, CEO and founder of Engage3 explored the opportunities for grocery retailers to improve price image with individual shoppers (based the work that Circular Logic is doing), and how new technology that facilitates personalization will impact everything from mass market offers to the price a customer sees on the shelf tag. Here’s Part 1 of their discussion. Part 2 will be posted in the next few weeks – stay tuned.
With the new HealthMarket format, it looks like Hy-Vee may break the pattern of failure by large-format operators who have attempted to open smaller outlets. Three key features of HyVee's approach are worth noting at a time when shoppers are shifting away from large, one-stop grocery stores and many traditional grocers are struggling unsuccessfully to “reduce the size of the traditional grocery store.”