Do they really give a SHIP?
Reflections on the insatiable appetite of grocery retailers to offer same day delivery.
By Scott Loyola, Co-Founder, Greenfence Consumer
Ok, I confess, like many of you I relish the fact that I can order products on Amazon and get exactly (most of the time) what I want on my doorstep within two days. It’s just simply too easy, and the combination of reasonable prices and convenience is intoxicating. I admit, even Amazon has done a respectable job at creating some motivation to click on items that I don’t necessarily need, but then again, I have been known to suffer from a quick trigger finger. I’m working on it and have sought counseling, but I digress. I find that from a loyalty perspective, they sort of have me held hostage with Prime. It works. It checks all the boxes and more. Well done.
That being said, I draw the line at food. PERIOD.
I simply do not see the need to have my groceries delivered and although further growth is projected, most consumers aren’t clamoring for delivery either.
A recent study by FMI suggest that while there is significant buzz and focus by grocery retailers to keep up with Amazon and other e-commerce options, only 2% to 4.3%* of grocery sales originate online. Although further growth is expected, by 2025 only 20% of grocery sales will occur online. So then, why does it seem that getting me to be “more loyal” is about hooking me with delivery options and less about selection, merchandising, and good old-fashioned service?
“*&%^$#@, I’m out of bananas!!”
It’s clear I am not the target consumer, but I simply don’t see the rush to have someone else shop for my groceries, let alone have them delivered in the same day, or within two hours for that matter. Moreover, I can’t get past having someone decide on best coloring for my watermelon, the firmness of my bananas, or other precise and personal shopping skills I’ve honed over the past few decades. I actually enjoy going to the grocery store — mainly because I’m able to brainstorm ideas for dinners that will be served that week. I can be a bit finicky, so I like to have a voice in what we eat. With five kids I usually get over-ruled, but I go to the market anyway with the hope of being heard.
Nothing stays the same…
I’ve seen many changes over my 30+ years in the grocery space. We’ve gone from key entering price and department info, to barcode scanning technology in the early 70’s that greatly increase speed of checkout and service levels. In those days, manufacturer promotions were passed through to consumers, that is until the advent of the loyalty program where your profile drives your ability to “get” those same temporary price reductions. Special promotions and offers were unique to some retailers, but now, just about every retailer has some form of gimmick or program to create loyalty and retention. Themed ad mailers used to suggest how to pair a juice, with eggs, and muffins to create a meal, now meal solutions are a growing business for a busy lifestyle with third party suppliers beginning to enter the store. So, I get it, things change, and delivery may be one of those things that years from now we consider to be a standard and something that is necessary to retain customers. But for now, there needs to be more focus on how to grow basket size by using the distinct advantages grocery retail has over e-commerce titans.
In this race to fend off Amazon, I believe some retailers have simply lost sight of their distinct advantage — their physical stores. For many, as the data would suggest, the grocery shopping experience is still that, an experience. History will show that one of the industry’s great strengths is its ability to use good old-fashioned merchandising to motivate purchase. From holiday displays to Superbowl events, through summer grilling sweepstakes, grocery has always done a tremendous job at creating motivation and sales from special merchandising events. This connection is hard to replicate in an online environment where the playing field is price and ease of fulfillment. Further, you simply can’t smell the fresh baked goods, taste the fresh cut service deli meats and cheeses, and truly appreciate the artistry that is the meat and seafood case. For me, this is the grocery experience, not a button or click.
So, what’s missing? Maybe nothing, maybe everything, it’s really up for interpretation. But my sense is that most retailers are focused heavily on keeping pace with Amazon, and less focused on what really creates their unique advantage — their stores. It seems that they want to make sure I get groceries fast, and conveniently, and have forgotten that what I want is more information on products I buy, greater transparency in the food supply chain, and more ideas about healthy eating and meal preparation.
Anyhow, I’m sure this will all get sorted out, and retailers will find their level with respect to consumer engagement and furthering the in-store experience. Technology will create some exciting options to grow sales, innovate categories, bolster loyalty and rewards and more. I’m looking forward to that, especially because our Blockchain platform is already making a difference in these areas and can be customized to enhance consumer programs with transparency and predictability.
* https://www.forbes.com/sites/pamdanziger/2018/05/22/race-is-on-for-last-mile-grocery-delivery-but-are-grocery-stores-losing-the-bigger-opportunity/#1727e21e3d81
About Greenfence Consumer
Greenfence Consumer creates Blockchain based mobile platforms for brands and retailers, enabling advanced engagement tactics and gamified loyalty and rewards programs. Greenfence Consumer has integrated Blockchain technology into coupons and rebates to prevent fraud, control shopper marketing budgets and enable the unbanked to participate in cash back programs. Greenfence Consumer also distributes crypto wallets that manage the next generation in targeted marketing and the distribution of GFT™ Authentic Digital Collectibles™, digital assets on the blockchain. Greenfence team members include Grocery Retail and CPG, Food Broker, Hollywood executives, startup founders, early crypto advocates, technology and Blockchain specialists, all with award-winning backgrounds in their fields.
