The introduction of Amazon’s Dash Cart gives its new grocery stores a
unique and powerful shopping option that bridges the self-service model and
digital world and allows shoppers to execute speedier shopping trips. Some
folks are critical, but we think it will be revealing to see what shoppers say.
Here are three lessons we have learned from 15 years of industry experience
with "scan and bag."
Aldi is putting more energy into its own-product innovation to deliver
“unexpected products at amazing prices,” and also leveraging cause
marketing to support childhood cancer research. This enhanced
product/marketing strategy has the potential to attract new customers to
its stores and encourage existing customers to buy more as well. This
one-two punch could generate competitive advantage that will be
difficult for other retailers to duplicate.
Many key performance metrics related to online grocery delivery and pickup activity climbed steadily in June, according the June 2020 Brick Meets Click/Mercatus Grocery Shopping Survey. The growth illustrates that the use of online grocery
delivery and pickup services is becoming a more integral part of how a
broader base of consumers shop, as both order frequency and household
penetration continue to increase.
Amazon’s big strides in grocery show up clearly in Brick Meets Click’s May 2020 online grocery research. Top line: Amazon’s household penetration for grocery has more than doubled since 2018. But this increase isn’t just due to COVID – it’s due to Amazon’s disciplined implementation of a strategy to capture and serve affluent shoppers. Here’s what’s behind the numbers.
The rapid growth of online grocery purchases due to COVID-19 has brought attention back to the challenge of creating the flexible capacity retailers need to efficiently fulfill online orders and make the business more profitable. So how do retailers start to sort through the options?
Concern about contracting COVID-19 continues to impact how people shop, but the pandemic is also influencing what they buy, according to findings from the Brick Meets Click/Mercatus Grocery Shopping Survey. The net increases in private label buying are
remarkably broad-based, encompassing all age groups and income segments in May 2020. Here we focus on the broader implications of how shoppers find "more value for their money" and how that will impact the food distribution system.
In May, our third month of monitoring Covid-19's impact on online
grocery shopping, the key metrics for online grocery fulfilled by
delivery or pickup continue to climb and set new records according to
the Brick Meets Click/Mercatus Grocery Shopping Survey conducted late
May 2020. The continuing momentum of growth shows how online
ordering/buying is becoming an integral part of grocery
shopping for a broad base of consumers.
Increased demand for home delivery due to the health crisis has retailers looking more aggressively for ways to lower costs and improve the customer experience. Walmart Express Delivery, which leverages AI/machine systems learning to coordinate deliveries, is the latest entry that will have competitive significance. The arrival of Express Delivery doesn't mean other retailers have to follow Walmart's approach, but it does signal they will have to invest in their processes to stay competitive.
The US grocery industry is being buffeted by two major impacts related to the coronavirus pandemic: 1) fear of Covid-19, and 2) loss of income. Based on the results of Brick Meets Click’s April wave of consumer research, here we explore the second impact, significant income loss and what it may mean for shopper behavior and the future of the grocery business - from online grocery to competitive shifts and brand preference.
Everyone's thinking about how the number of online grocery shoppers will change as the COVID-19 crisis evolves. In our April wave of shopper research, we started to gauge how the fear of contracting the virus is related to the current increases in online grocery shopping usage. Here we explore what the results may mean for the future of home delivery and store pickup usage as we move through the pandemic’s initial stage.
We're monitoring Covid-19's impact on online grocery shopping on a monthly basis. April's topline: Online grocery sales for pickup and delivery grew 37% to a total of $5.3 B compared to March 2020’s total of $4.0 B, according to the latest Brick Meets Click/Symphony RetailAI Online Grocery Shopping Survey. Read on for more results.
All online sellers of grocery have struggled to keep up with the demand generated by the coronavirus crisis, but for Amazon it’s probably particularly jarring since the company has set such high expectations for customer service. The demand surge looks like it has caused a major shift in Amazon’s strategy and created a new key priority for the company that will create ripples across the market.
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.
Our just completed consumer research documents the the surge in online grocery resulting from the COVID-19 health crisis: 31% of U.S. households (about 39.5 M consumers) have used an online grocery delivery or pickup service during the past month compared to 13% (16.1 M consumers) in August of 2019. This March 2020 scorecard summarizes the impact on five key performance metrics: sales, spend, orders, customers, and order frequency.
Publix enjoys some of the strongest customer engagement in the
grocery industry. Now it’s taking on another challenge: extending those
strong customer relationships into the digital world. Club
Publix will give the retailer a way to collect the information it needs
to personalize offers – and make them so valuable that customers will be
eager to participate.
Local Theory, the latest in Walmart’s portfolio of tech companies, has apparently emerged from operating in stealth mode. In a Tucson, AZ Supercenter, a technology scout from Brick Meets Click recently found what looked like a new digital shelf label, but it turned out to be part of an AI/machine learning system designed to solve a merchandising challenge that has frustrated retailers for a long time.
When the array of product choices outstrips the ability of grocery stores to display them all, it creates a dilemma for both retailers and brands. Purdue brands' new direct-to-consumer website, Purdue Farms, is one response. So do retailers walk away from this business or find a practical way to add it to their "endless aisle"?
Two recent healthcare/food retail pilots signal opportunities as the healthcare ecosystem expands into new areas at the intersection of food and health. Consider the initiatives – FarmboxRX and Giant Foods’ Produce RX – as early signs of how the economic interests of health insurers and food distributors are now merging. Expect more to come.
Last year, Aldi made a subtle but significant shift in pricing strategy – using Aldi Savers to move from pure EDLP to hybrid EDLP/high-low pricing– and this will likely accelerate its growth. Historically, Aldi's growth has been constrained by the relatively small share of consumers who are willing to regularly shop the hard discounter to get the "most value for money," but Savers has the potential to expand that customer base.
Walmart's two recent strategic shifts have important implications for supermarkets as they compete with the company for grocery business in 2020 and beyond: First, Walmart's leadership has expanded the definition of its stores by introducing new services that leverage its proximity to market, and second, it's also placing new emphasis on generating profits, not just sales growth.
The Walmart IRL store was unveiled in April 2019 by Walmart’s in-house tech incubator Store No 8. Its goal: “To improve the shopping experience for the 160 million Americans who shop inside our stores weekly – not just the technology elite” by creating an experience that is faster, cleaner, smarter, and more seamless. We went to check out the store, and here's what we saw.
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
It looks like Aldi is testing or
implementing a new broader based pricing strategy in the northwest Chicago
Market and possibly beyond – one in which they set prices in relation to competitive prices and the
overall pricing in the stores is zoned to the local market. If this is where
Aldi is heading, it’s a big shift, and one that risks eroding the strong price
reputation they’ve spent years establishing.
Healthcare is poised for a big-time disruption and yet it seems that many supermarkets won’t get to maximize this opportunity for growth if they don’t start to think bigger. Here are our thoughts. What big opportunities for supermarkets do you see as they move into the emerging healthcare ecosystem?
Find the perfect the dinner - Uncle Ben’s, a
Mars company, is the first brand to use Google’s AI-powered visual
search tool, Google Lens but it probably won't be the last. This tool is one more way to answer the
question, “How do you bring more information into the aisle to help
customers find and buy the products that are right for them?"
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.
Amazon has leased the majority of a high-cost, multi-story warehouse near south Seattle. This is clearly part of its strategy to reach 90% of shoppers with same-day
or next-day delivery – but why is Amazon is still using traditional
warehousing concepts in a market where extreme space limitations argue for
taking a different approach?
Aldi recently added the “Aldi Savers” symbol to its weekly ad and instore as well. So why would a discounter that already offers very low prices decide to add to its otherwise straightforward merchandising tactics?
This July in Tel Aviv, CommonSense Robotics broke ground on its first full service, 3-temperature-zone, micro automated fulfillment center for online grocery orders. Three things make this deployment of automated fulfillment unique – its location, a “pay as you go” service proposition, and the potential for multi-tenancy.
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.
Recent announcements show that leaders at both Target and Kroger are aggressively pushing their organizations to more quickly move to “test and learn” to drive growth. This shift – even more than the specific innovations – should be a wake up call for supermarket competition that has traditionally had the advantage of agility and the ability to respond quickly.
For a couple of years, there have been many signs that Whole Foods is not Amazon’s final destination in grocery given their need to win in grocery to be able to dominate retail. Now a recent New York Times article a describes a completely different grocery concept being contemplated by the company: a food store built from the ground up to seamlessly accommodate online and in-store grocery shopping. We believe there is serious “fire behind the smoke.” Here are three reasons why.
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.
Walmart’s new pickup/delivery facility in Lincolnwood, IL feels less like a test of whether it can operate a "dark store" location successfully and more like a test of whether it can expand its ability to serve customers in the kind of densely-populated markets favored by Amazon. The question will be, can they attract enough business? Especially when others in the market already offer the service.
Ahold Delhaize's roll-out of 500 robot shelf scanners to Giant/Martins and Stop & Shop stores in the Northeast has been described as the largest ever launch of in-store robots for a supermarket. Check out this video from a Sparta, NJ, Stop & Shop to see how Marty the robot maneuvers around shoppers, employees, displays, and even the occasional stroller.
Today there are three generations of checkout technology available: fixed-location,
portable “scan and bag,” and camera and sensor-based shopper monitoring. This raises a question: How should grocers think about which type of
self-checkout to offer their customers? Since the decision about where to invest will have a major impact on a retailer’s
ability to attract and retain customers, grocers need to evaluate
the options carefully and not just buy “the flavor of the day.”
Carrefour’s withdrawal from the Chinese markets holds lessons, if not implications, for other large grocery retailers about successfully moving through a digital transformation and responding to the changes that happen when shoppers no longer need to go to the store to get fresh food and perishable products like produce.
Now that grocery retailers can use SMS and mobile apps to broadcast Flash Sales instantly to a broad audience (instead of overhead loudspeakers), they are becoming a more popular way for supermarkets to trigger a customer trip to the store. Customers get to save money, and retailers get to reduce food waste, shrink, and the cost of unsaleable items.
Shrink is a $47 billion problem for the retail industry according to the National Retail Federation. Walmart has been using computer vision technology to successfully reduce shrink in 1,000 of its stores by monitoring activity at both self-checkout and cashier checkouts. This signals to other retailers that they, too, need to be thinking about where automation can improve their margins.
Walmart’s updated in-home service is different in many ways from its earlier test, and it's even better positioned than before to gain stronger traction with a small but growing segment of grocery shoppers. Here are several ways the retailer's new in-home grocery delivery service is unique.
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