The biggest story this week in grocery came, as it often does, care of the new Whole Foods Market as operated by Amazon. Curbside delivery is coming to the grocery chain, starting with two test runs — one in Virginia Beach one in Sacramento. As a benefit for Prime members, customers who order their groceries online from Whole Foods will be able to pick them up curbside within 30 minutes.
“Pickup from Whole Foods Market is a perfect option for customers who want to grab healthy and organic groceries at their convenience, all without leaving their car,” said Stephenie Landry, Vice President of Prime Now, AmazonFresh and Amazon Restaurants. “A customer can order at 5:00 p.m., pick up at 5:30 p.m. and we’ll have their groceries loaded into their car just minutes after arrival. For an even faster experience, customers can tell us they are on their way using the Prime Now app and groceries will be ready as they arrive.”
To access the service, users can order through the Prime Now app and choose pickup as a checkout option. The service is free for orders of $35 or more — less than that threshold, accessing the service costs $4.99.
Though it might be easy to award Amazon the sizzle of the week for its latest shot across the bow of the nation’s established grocery players, it is curbside pickup that deserves to take the box this week, since it was far and away the most favored tactic to adopt in early August 2018.
Discount grocery retailer ALDI has found itself in an ongoing price war with its competitors: Walmart, Kroger, Target and Lidl. This week, ALDI also announced that it will be expanding its online grocery services and that it will be launching curbside pickup in the U.S.
ALDI also announced that delivery is on the docket, in partnership with Instacart. The service is already available in a few select U.S. locations, but the goal, according to U.S. CEO Jason Hart, is to expand both services to all U.S. stores. In an interview with Business Insider on Wednesday (Aug. 8), Hart noted the discount grocery chain has been heartened by the results it has seen already with delivery in a handful of markets.
“We’re very excited about our growing partnership with Instacart,” Hart said. “The initial results have been overwhelmingly positive.”
Curbside, he noted, is not far along in its development, but he did note that the company will soon begin pilots with it, though he did not say exactly when. And though ALDI is getting into the race, it is getting in late.
Amazon has two locations under test and, given the speed Prime Now delivery rolled out to 32 cities in under 9 months, it is easy to imagine that the location number will grow much larger soon. Walmart has already expanded curbside pickup to 1,500 of its stores nationwide, and made it crystal clear on its Q1 earnings call that it is set for much more expansion by year’s end, since it’s a major driver of their grocery business. Oh, and as of this week, Walmart also had a big curbside delivery announcement — telling the world that, going forward, it might be adding robots to its pickup process.
No, seriously.
Last Friday, Walmart announced that, while curbside pickup was convenient, it could in fact do it even better as a drive-through window. The nation’s largest retailer by sales is partnering with Alert Innovation to build out a robotic fulfillment center in its Salem, New Hampshire store.
According to reports in Supermarket News, the new design will see a 20,000-square-foot extension to the Salem location, which will house what Walmart is calling the Alphabot system. That warehouse will be where online grocery orders are picked up, and will be accessible via drive-through lanes for customers.
Those are just the big curbside announcements in the last seven or so days. Both Kroger and Target have, in the last several weeks, announced big expansions to their curbside pickup programs. Target is rolling out 200 more curbside pickup locations in the Midwest, bringing its total count to 800 curbside pickup stores in 25 states. Kroger already has 1,100 curbside locations, and has stated its goal to grow that figure by another 500 by the end of the year.
Why is everyone rushing so quickly to curbside? Well, consumers like it — and tend to voice their enthusiasm with increased spend. Walmart wasn’t the only retailer trumpeting its efficacy in its last earnings report. According to Kroger’s fiscal Q1 2018 earnings report, the company’s digital sales grew 66 percent over the prior quarter, a pickup the company credited to ClickList: its buy online, curbside pickup program.
“When a customer engages with us digitally, we get a higher share of their total household spend. And what we find is the customer still comes into the store, but they come in to it based on when they want to,” said Kroger CEO Rodney McMullen.
Plus, curbside is a nice compliment to delivery, particularly in suburban and rural areas where it will probably never be cost efficient to offer free grocery delivery within two hours. Offering the ability to set a pickup time, especially if that time can be as soon as half an hour, is not a bad counteroffer.
As everyone begins offering it, and as curbside becomes more table stakes than special feature, the next round of competition will be who does it best. Amazon always puts in a strong performance, but Walmart is using robots — and PYMNTS has a known enthusiasm for any plan that involves a robot.
In any case, it will be a race worth watching, and one that is sizzling this week.
Sizzle
Marketplace lending: Firms put up numbers amid earnings reports, showing traction in the model that online is the place to be. OnDeck posted 26 percent growth in its loan originations, while LendingClub stated it had a 31 percent boost. The companies also noted that credit quality has improved among borrowers. In the case of OnDeck, charges are down hundreds of basis points year over year.
Auto claims, with a smoother road ahead: A Safelite/Ingo partnership shows that killing the check makes sense in several verticals, especially in insurance. Submit a claim in minutes, get an estimate in an hour, get paid instantly … and no more waiting for the check in the mail.
Cash: Still king in India, where despite demonetization efforts (as noted in the PYMNTS Global Cash Index), underground conduits and usage within rural communities should keep compound annual growth rate (CAGR) at 10.5 percent. That stands as a sizable chunk of commerce when one considers $1.5 trillion in cash spent in 2016.
Fizzle
Going to the mattresses: Night night, bye bye, as Mattress Firm mulls bankruptcy. The company is looking to stanch some bleeding by walking away from some money and losing brick-and-mortar operations. The latest retailer to hope, with futility, that this whole eCommerce-eating-traditional-retail’s lunch was just a bad dream.
Trojans: Beware of hackers bearing … gifts. Cybersecurity firm ProofPoint reports that as many as 42 percent of attacks in the second quarter were Trojans, which dupe unwitting victims into downloading malicious software. That far outpaces the ransomware tally, which stands at a relatively meager 11 percent.
Ride-hailing firms: They may get a slowdown amid New York City’s possible one year ban on new licenses for ridesharing firms. The move, should it equate to a thumbs down for new market entrants, may set a tough precedent for free market competition.
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