Sizzle Of the Week: Grocery Customers
It’s a good week to be a grocery shopper in America – because, after all, who doesn’t like being pursued?
The grocery business in America is a $650 billion industry. And like the prettiest girl at the dance, America’s grocery spend is the highly sought-after object of everyone’s affection. This week, the consumer got a taste of just how much their affection is worth to the country’s grocers.
Amazon announced that two-hour grocery delivery is about to become a free benefit for Prime members in range of a Whole Foods store, with a further option to pay $7.99 to receive their food in an hour. Prime members with the Amazon Prime Rewards Visa Signature credit card will be rewarded with 5 percent cash back at Whole Foods, and the Prime program will also soon be the rewards program for all of Whole Foods. Thus far, that has translated to price cuts at Whole Foods for Prime members, with future benefits noted, but not yet specified.
Walmart, during its quarterly earnings announcement, spent a great deal of time explaining its grocery strategy – and for three good reasons.
First, see Amazon. Second, grocery is roughly 55 percent of Walmart sales, and third, see Amazon.
CEO Doug McMillon noted that Walmart, like Amazon, would be experimenting with some grocery delivery in the future, but also noted that it will happen across a variety of platforms, and that providers will be location-specific. It will not be an area of unitary focus.
As for Walmart’s buy online/pick-up curbside program for groceries, McMillon was much more verbose, noting that the program’s runaway success is pushing Walmart to double down on it – literally.
“We’ll lean in this year by nearly doubling the number of online grocery locations in the U.S.,” McMillon predicted.
Meanwhile, grocery chain Albertsons announced that it will buy the part of the Rite Aid drugstore chain that was not purchased by Walgreens last year. Albertsons will convert its existing pharmacies to Rite Aid stores, while current Rite Aid locations will operate as standalone pharmacies. Together, the company will operate around 4,350 pharmacy counters and 320 clinics across 38 states and Washington, and will be worth around $83 billion.
“The new company will have an expanded footprint and be ranked first or second in 66 percent of the top metropolitan areas in the United States and will be ranked first or second in 70 percent of pharmacy locations,” Albertsons and Rite Aid said in a joint statement.
So, getting bigger, more convenient and with a wider array of services on offer – that’s not a bad haul for customers, and we’ve still left out one big perk: cheaper. News reports this week indicate that in Texas and the rest of the U.S., wherever Walmart cuts prices (and after all, they are within 15 minutes of 90 percent of American consumers), prices in the area continue to drop as retailers race to undercut Walmart.
The net result?
Peanut butter – among many, many other consumer packaged goods – has never been more affordable.
It may not feel all that sizzly to the merchants who are going to ever more complicated and costly lengths to draw the footfall of consumers hungry for a bargain. But for the American customer contemplating a grocery run this weekend, it’s a sizzling time as scores of retailers are trying their best to woo them.
Sizzle
Consumer choice at the pharma counter: We all grumble at how much things cost at the pharmacy – like prescription drugs, of course. And now here comes Amazon, where price competition is the name of the game – and where, because it’s Amazon, some of the bigger drugstore chains might be reaching for the aspirin or smelling salts. The eCommerce giant is launching an over-the-counter health care line – private label, of course – and with likely lower price points, which might keep consumers’ pocketbooks in the pink, so to speak.
Chatbots on the rise: Chatbots are expected to handle 25 percent of customer service functions within two years. That’s good for companies freeing up staff, and good for consumers who hate waiting on the phone. Moving forward, estimates research firm Gartner, as more than half of organizations have invested in automation, customer interaction across digital channels will bring the tally of customer service and support served by bots to the double-digit range, up from 2 percent today. Quite a jump.
Szechuan sauce (c’mon, this is a fun one): Hot stuff indeed, as McDonald’s gears up to ship 20 million more packets of the condiment to its outlets. What started as a one-off tied to Mulan now stands as a genuine trend – to dip nuggets, it seems.
Fizzle
Social Security numbers: Amid the continuing drumbeat of critics who say that the SSN is a static and dangerous identifier to have floating around the Dark Web, they are indeed beloved by the bad guys, where new account fraud, powered by SSN, was up 120 percent year over year. That comes as 16.7 million Americans were victims of identity theft last year, up 8 percent from 2016, as Javelin Research estimated.
Coinbase – and the dangers of crypto exchanges: Coinbase saw its consumer complaints skyrocket year over year, to more than 900 complaints thus far in 2018 alone, up from a little less than 300 from January through August of 2017. The complaints alleged that users were charged repeatedly for the same transactions. Or, unknown parties crept in and drained their accounts. Security may be lax, it seems – and in the meantime, the company is scrambling to boost its customer service offerings.
iPhone X: Might it really become a, well, ex-phone? The X factor proves to be a dud as Apple finds it tough going for the beleaguered phone in Asia. As it turns out, consumers in China, India and Indonesia are choosing alternatives from Xiaomi, OPPO and Vivo, among others. Meanwhile, Apple’s market share in the region is flat.
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