At the intersection of food sales,
technology, and consumers is the focal spot that most retailers are working
hard to please consumers according to Steven Johnson
Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.
Johnson
stated, consumers are dynamic not static when the consumer moves you must move
with them or risk losing customers to another grocery store or another avenue of
fresh food distribution entirely.
Today research show that grocery
retailers continued to shift their customers toward store pick-up and away from
grocery-delivery in 2022 as they seek to unlock the potential profitability of
online grocery.
In case you did not know, grocery store pickup
and delivery vied back and forth for share of the digital grocery market
through the first half of 2022, pickup pulled away as a preferred method of
fulfillment for customers during the last several months of 2022, according to
research from Incisiv and its Grocery
Doppio digital grocery data platform. Overall, 52% of all digital grocery sales
in 2022 were fulfilled via pickup as opposed to delivery.
Here is what we found previously written
about the shift and wanted to share; “Within,
delivery, meanwhile, in-house fulfillment has gained against third-party services,
increasing from 23.6% of deliveries in August to 25.8% in December.
Many grocery retailers continued to
expand their partnerships with third-party delivery services in 2022, however,
as they sought to capture the growing percentage of sales that take place
online and, in some cases, meet demand for rapid fulfillment of orders.
Grand Rapids, Mich.-based Meijer Inc.,
for example, in December reached an agreement with Uber Technologies for the
ride-services company to provide grocery delivery through the Uber and Uber
Eats apps. That agreement followed similar partnerships between Uber and Smart
& Final, Albertsons, Grocery Outlet and SpartanNash.
Meanwhile, Cincinnati-based Kroger Co.
recently unveiled a partnership with DoorDash, known for its restaurant
delivery services, to deliver sushi from 900 store locations and floral orders
at 1,600 store locations.
“By offering
customer-favorite sushi options and premium floral bouquets through third-party
marketplaces we are continuing to evolve and meet customers where and how they
are shopping,” Stuart Aitken, Kroger senior VP and chief merchant and marketing
officer, said in a statement at the time.
Kroger also has
partnerships with other third-party delivery services, including Instacart and
Shipt, and has been aggressively expanding its own capabilities with the
addition of “spokes” that expand its delivery reach via its partnership with
European e-commerce automation specialist Ocado.
Kroger also has been
among the leaders testing autonomous delivery. It launched a partnership with Nuro, a provider of robotic delivery
vehicles, in 2018, and last year unveiled plans to expand it in the Houston
market. Modesto, Calif.-based Save Mart also has tested the autonomous Nuro
vehicles for grocery deliveries.
Discount grocer Aldi,
meanwhile, is among the retailers that appear poised to take more of their
delivery in-house. In October, the retailer said it was working with
German-based Spryker Systems to develop a new online platform for its U.S.
locations that would include grocery delivery and / or curbside pickup service.
Aldi has long worked with Instacart for both pickup and delivery.
Another model some
grocers have adopted is to leverage white-label online grocery fulfillment
services, as exemplified by the new partnership between Southeastern Grocers
and DoorDash. The Jacksonville, Fla.-based retailer, which operates the
Winn-Dixie, Harvey’s and Fresco y Mas banners, described the service as “an
extension of shopping our local stores.” It allows the retailer to better align
its online and in-store pricing, the company said.
Up-Date Ultra-fast delivery:
gains and losses
Several retailers also
partnered with third-party firms in 2022 to offer rapid delivery, sometimes in
as little as an hour or two, or even less.
Save Mart in October
said that Save Mart banner stores in Lathrop and Ceres, Calif., began offering
two-hour grocery delivery via Amazon, and that the company planned to expand
the service to additional locations.
“The Amazon partnership
represents The Save Mart Cos.’ ongoing digital transformation to serve our
shoppers and fulfill their needs with innovative and affordable solutions,”
Tamara Pattison, senior vice president and chief digital officer for The Save
Mart Cos., said in a statement at the time.
That agreement followed
a partnership between Ontario, Calif.-based Cardenas Markets and Amazon,
announced in September, through which the e-commerce giant began offering
two-hour delivery at several locations in California and Nevada.
St Louis-based Schnucks,
meanwhile, in October unveiled Schnucks Now, offering delivery in as fast as 30
minutes for a limited assortment of fresh groceries, pantry, household
essentials, alcohol, meals, and snacks. The service is available to customers
via the Schnucks Rewards App and the Instacart Convenience Hub, an Instacart
marketplace product feature.
Schnucks’ launch of
30-minute delivery followed the debut of 15-minute delivery at Lakeland,
Fla.-based Publix Super Markets, which partnered with Instacart’s Carrot
Warehouses fulfillment solution to offer the rapid-delivery service at a small
number of Florida stores.
Customers can access the
service either through the retailer’s own mobile app or website or Instacart.
Overall, however, the
ultrafast delivery model, exemplified by companies such as Gopuff, Gorillas,
Buyk, Getir, Jokr and others, struggled in 2022, after enjoying a surge during
the pandemic.
Russian-owned Buyk filed
bankruptcy and ceased operations in March after sanctions imposed following
Russia’s invasion of Ukraine, and Jokr in June said it was shutting down its
U.S. operations.
Gopuff, meanwhile,
announced multiple rounds of layoffs and facility closures in 2022.
Other ultrafast grocery delivery services
consolidated in 2022, as Getir agreed to acquire rival Gorillas in a
transaction reportedly valued at $1.2 billion. Both companies have a broad
European presence but only entered the U.S. in 2021. Berlin-based Gorillas,
which promises 10-minute delivery from a network of micro-fulfillment
warehouses, began operating in New York City in May 2021, while Istanbul-based
Getir launched in Chicago in November 2021, followed by New York and Boston.
Don’t over reach. Are
you ready for some fresh ideations? Do your food marketing ideations look more
like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your
retail food brand while creating a platform for consumer convenient
meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the
following links: Facebook, LinkedIn, or Twitter
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