It’s easy to come up with the idea of selling local food
online. It’s harder to get
farmers, retailers, and consumers all “singing from same sheet of music” in
order to create a cost-effective food distribution system. The beauty of Farm
Drop – a new, UK-based online market that connects farmers directly to consumers – is
that it simplifies the challenge with innovative approaches to compensation and
Changes in the retail environment are clearly
accelerating! Against this backdrop, we asked Ron Lunde for
his thoughts. Formerly a senior merchandising executive at
Super Valu, Grand Union, and Price Chopper – and an SVP with Leo
Burnett, Ron is one person we know who can confidently address the ways
in which digital is profoundly changing the way we shop.
It’s clear that many new food stores will be built with significantly
smaller footprints than traditional supermarkets. Check out David Rogers’ presentation to the Supermarket
Location Research Conference for a great framework for understanding the
go-to-market strategies being used by this new generation of small food stores.
The big players in online grocery (like Amazon Fresh) may
get the most attention, but plenty of smaller scale innovation in the market is
worth a careful look – some of it will grow into viable competition. The new Zoomin
Market in Olathe, KA may be one such innovator and their customer interface is worth a look.
Digital coupons are popular, but there’s always the issue of
how smoothly they fit into the shopping experience. The new mobile app Checkout
51 seems to resolve many of these issues. It also makes coupon delivery more
efficient for manufacturers.
Spending on food is growing slowly and
new competition continues to enter the market, so retailers need to look for
new ways to sustain profits, but they also need to carefully consider how they
evaluate growth. Focusing more
attention on the main retail asset – the store itself – can be one of the keys.
A recent report prepared by Fluid and
Wells Fargo scores customer experience at online grocery sites on a wide range of criteria. What
surprised us was how much higher Fresh Direct scored than the rest of the
pack which included Safeway, Google Express, Amazon Fresh, Peapod and three other big players in the US.
As we explore how online grocery will grow, we see
two approaches – either drive more sales to current online shoppers or bring
entirely new groups/segments of shoppers into the online food market. When we first learned about Front Door
Farms they struck us as a great example of the second option playing out.
Here’s a new concept that’s worth a look. Food
retailer Lunds and Byerly’s has turned the “grocery store with a prepared foods
department” on its head. They’ve opened a restaurant to promote their online
grocery shopping option and carry-out food offerings. The restaurant also
serves as a pickup point for online orders.
challenges facing today’s retailers, it’s worthwhile shining a light on Kroger’s
leadership role in developing a new Retail Site Intelligence (RSI) enterprise IT architecture.
It will serve as the foundation for a broad range of retail innovations that
give Kroger the ability to digitize the store and improve the shopping
Alibaba’s Tmall Supermarket is a good example of how much
creative flexibility is possible when a retail business model is built out on
the internet. Partly, this is
because it’s possible to reconfigure a virtual operation quicker and at a lower
cost than brick and mortar, but the real headroom is found in making changes
that deliver greater value to customers – and some of these possibilities aren’t
even imaginable until a retailer begins to think differently about the
Google Glass has the potential to transform food and grocery
shopping. The device being hands-free
makes a big difference in terms of attention and focus. Check out this video to get an idea of just how much it will change the experience.
So far, most of the retail food sector’s attention to technology has focused on helping people execute “traditional” shopping activities quicker and easier –
building shopping lists, personalizing circulars, offering digital coupons – but there are signs that much bigger changes are on
the way. Here's what I see.
The key to success in retailing is aligning your
offer with the needs of your customers. What's needed is a proven process that
makes it easier to achieve that alignment. The new report from NACS/CCRRC
delivers a shopper research-based growth "formula" that easily
translates beyond convenience to other types of food retail as well.
decision to offer customer service through its iBeacon trial instead of
promotions is intriguing. Retailers can hurt themselves by delivering promotions and selling products because they
were paid to do so, not because their customers wanted them. Tesco's choice will benefit
shoppers while allowing them to warm up to the new technology slowly.