Kagan: Grocery kicking to high gear with e-commerce, home delivery
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We have seen the e-commerce wave transform industry after industry ever since Amazon.com started selling books online in the early 1990's. However, the grocery industry has taken its time entering this new space.
But now with the Amazon acquisition of Whole Foods, I expect the grocery industry to really kick their e-commerce and home delivery efforts into high gear.
The grocery industry has been transforming for decades. You remember 20 years ago when a trip to the grocery store was no more than a walk through a concrete warehouse? Compare that to today where a trip to the grocer can be an adventure in a store ornate enough to feel like you are in a very high-end amusement park for grownups, with colors and sounds and smells galore.
We've seen new ideas like self-check-out lanes and using your iPhone or Android smartphone to pay. So, innovation has been rolling out in the grocery industry for decades. However, taking a close look at what some grocers like Kroger are preparing to launch makes yesterday look like a gentle walk in the park in comparison.
Grocers don't yet have the skills needed to transform
As grocers move into this new area, it is a big challenge for them because this is the great unknown. They must get up to speed as quickly as possible to remain competitive as the grocery industry is making a sharp turn and accelerating with players like Whole Foods and smaller players like Trader Joe's and Sprouts.
Grocery executives who are facing this massive opportunity and challenge, understand there is a big black-hole in the skill set they bring to the table.
They know they need to bring in talent from the outside to help them transform. That means they need to first find then hire people with e-commerce experience. They also need to partner with firms with the know-how to help them make this huge leap.
Grocers can't sit out this wave of change
It's not like grocers can simply choose to sit this change wave out. If they do, the change wave will pass them by, leaving them behind where they will slowly wither and die.
No, this is an opportunity every grocer needs to sink their teeth into.
Delivery is another example. The talk about big grocers having the customer order already in bags and sitting in a cooled locker. Or delivery service to customers who don't have the time to make it to the store.
This is terrific, but it's so important to realize this is just one slice of the pie. Many customers like the shopping experience. Many will not use the pre-shopped bags of groceries or delivery services. They prefer to walk the aisles and see what looks good. They enjoy the experience.
Every grocery store must look at itself as a pie with slices
So, every grocer must look at their business as one big pie with lots of different slices. Yesterday, there was just one big pie with no slices. But going forward, different shoppers will expect different ways to shop. So, every grocer must have many different ways serve the shopper.
If they don't, then the customer will simply go to a competitor who does. And it's not like you can simply be in a new segment. You must do it well. Many brand name grocers do a great job, and many do a poor job at new segments.
Examples of what grocers do right and wrong
Walk into a Publix store and you will love the shopping experience. If you go to a regular check-out lane with a cashier your experience will continue to be great. However, if you use their self-checkout lanes, the experience gets messy and annoying. If you don't do every step in the exact right order you will not be able to check-out. This is very aggravating, yet Publix doesn't seem to care because it has been this way for years.
Kroger is better. Their shopping and check-out experience is also pleasurable like Publix. Plus, when you use their self-checkout lanes, you can press buttons in any order and it always works. Much better and more enjoyable experience. The customer always leaves happy.
Trader Joe's and Sprouts are two smaller grocery chains who take on the retail challenge differently. They don't have an office in the store. If you have any questions or problems, any cashier can help you. And when you pay, you can use your iPhone or Android and don't even have to touch a dirty screen.
This is what Kroger is testing right now in a limited number of stores. I applaud their vision and their effort. However, the time it is taking is way too long. They need to speed up their entry into this new area of e-commerce, order waiting and delivery if they want to remain competitive.
This is the new and changing challenge every grocer needs to prepare for. And unlike the last few decades where innovation can come at a snail's pace, now that Amazon.com and Whole Foods are competing with them, they had better start moving quickly. Either that or they risk going the way of Borders Books or struggling like Barnes & Noble. No one thought that would happen, but it did.
Jeff KAGAN Jeff Kagan is a Wireless Analyst, Telecom Analyst, speaker, author and consultant. Over 30 years he has followed the Customer Experience through technology like wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, AI, Mobile Pay, FinTech and more. Email him at jeff@jeffKAGAN.com. www