Mar 13, 2019
“People are reluctant to buy fresh food items online
because they don’t trust other people to pick the freshest produce
for them.” - Brittain Ladd (7:02 -
7:18)
Lori
Taylor
The Produce Moms
The Online Grocery Shopping Trend
As consumers, we have become increasingly comfortable with online shopping throughout the years, except when it comes to fresh food products. What we put in our bodies is rather personal, and we don’t like having other people pick out our apples and broccoli for us. However, recently there has been an emerging trend of online shopping services that have aimed to serve busy consumers by doing their grocery shopping for them.
Brittain Ladd, founder and CEO of Six-Page Consulting, was integrally involved in Amazon’s acquisition of Whole Foods. He is an industry and thought leader, and does work around the globe. He has worked with other corporate giants including Kroger, Walmart, and Dell, all of which have implemented strategies or made acquisitions Brittain recommended. Brittain is a strategic thinker and focused on global logistics in his work with Amazon. He first made the recommendation that Amazon acquire Whole Foods in 2013. He is a logistical expert and has much to share about the emergence of technology in the grocery industry.
While the idea of having someone deliver grocery items that you order through an app can be appealing to busy parents and professionals, it has its own set of drawbacks. By design, these services prioritize efficiency and speed, not the highest quality of produce for the customers. As a result, customers often end up with rotten food items in their grocery bags. The best way to make sure you’re picking the highest quality meats, fruits, and veggies, is to visit the local grocery store personally.
“Amazon is a major disrupter and grocery is no exception. Every major grocer is embracing e-commerce and other digital strategies to compete.” - Lori Taylor (14:29 - 14:44)
The Convergence of Tech and Grocery Industries
The recent acquisition of Whole
Foods by Amazon has been a significant catalyst for the convergence
of the tech and grocery industries. Many grocery retailers have
signed agreements with third-party fulfillment services like
Instacart, or they have installed e-commerce capabilities of their
own.
They did this to compete with Amazon, but it
might have been a shortsighted move on their part. A large number
of grocery stores that have installed e-commerce capabilities only
serve 1 - 2 % of their customers through online sales. The cost of
having digital ordering systems in place is exceptionally high when
compared to the revenue they are generating from them. Instead of
panicking every time Amazon makes a move, grocery chains would be
better served if they operated more intelligently, and gained a
better understanding of what their customers are looking
for.
One
area of investments that might serve retailers better is in
logistics and supply chain. Grocery stores work hard to get
customers in the door, or to convince them to place an order
online, and they need to make sure they have an optimal supply
chain to meet customer demands across all channels. There's no
point in marketing services that can’t be efficiently executed, and
logistics is a significant part of execution for grocery
retailers.
The Future of the Grocery Industry
Amazon will continue to expand. Amazon continues to disrupt many industries
across the board, and grocery is no exception. Acquiring Whole
Foods might only have been the beginning. It is estimated that
Amazon will be the largest retailer of groceries in the United
States by 2030.
This is excellent news for consumers. Amazon’s
expansion will force all the competitors in the marketplace to find
creative and unique ways to attract customers, resulting in a more
positive shopping experience. It is also likely that consumers will
enjoy lower prices and better choices.
Baked-on-the-way
trucks. A significant
trend that is expected to emerge in the coming years is
baked-on-the-way trucks. Customers will be able to order meals from
their local stores. The stores will prepare the meals with fresh
ingredients, bake them in their delivery trucks as they are on the
way, and deliver hot meals just in time for dinner. This is
expected to cause significant disruptions in the grocery industry,
as it will virtually eliminate the need for consumers to visit
grocery stores.
“It doesn't do any good to market a service if you can't execute, and execution is absolutely what logistics is all about for a grocery retailer.” - Brittain Ladd (19:38 - 19:49)
Today, luxuries like personal chefs are unattainable for most people. However, soon many people might be able to order a freshly prepared meal from their grocery stores through a smartphone app. The grocery industry is also expected to play a more pro-active role in public health, by empowering their customers to make healthier choices, and by helping reduce healthcare costs. These innovations, and others, certainly make it an exciting time to be a consumer.
How to get involved