Once upon a time, mothers everywhere told their daughters that the way to a man’s heart was through his stomach. Modern-day research even proves that point — preparing a home-cooked meal is regarded by 80 percent of those who make them as an “act of love.”
Today, grocery stores are doing everything they can to win the hearts of men and women who shop for food by using mobile, apps and even voice, to capture more of that spend.
The competition for that spend isn’t just the chain across the street or even the mass merchant superstores that sell groceries in addition to other merchandise. It’s a convenience store, the meal kit services, the specialty markets and the delivery aggregators who make it easy for consumers to order out to eat in their homes. Moreover, in the two years since Amazon officially closed its deal to purchase Whole Foods, the grocery retail landscape has become a series of maneuvers and counter-maneuvers in an attempt to gain the customer’s favor. Delivery, buy-online pick-up in stores, price slashing, rewards programs, product expansions — you name it, a grocery player has likely tried to woo customers with it in the last 24 months.
Also, what has been a brisk race since the year began in the last few weeks has picked up its pace considerably as Walmart, Kroger, Target and Amazon have all decided to end the summer with a grocery bag and a string of new pilots, products, partnerships and more.
Will it be enough to win anyone the war? That remains to be seen.
Walmart Makes An Content-Based Grocery Play
Eating is fun. Cooking is less so for most customers, mostly because it can take an awful lot of education and preparation to produce something a human being might want to eat. Walmart and Tasty, a Buzzfeed-owned food content app are hoping to change that — and unlock more of the joy of cooking, by making it easy for those watching the cooking videos on Tasty to add their ingredient lists to the Walmart grocery app. The add to a virtual shopping list feature will attach to menus in the 4,000 videos on the app. According to a joint release from the firms, customers can then order their ingredient list for pick-up at more than 2,500 Walmart locations nationwide, or possible have them delivered if they live near one of the more than 1,100 stores that have enabled that services.
Customers who use the app will also be able to swap out items as needed — based on preferences such as price, brand, quantity, or dietary restrictions.
“Finding that perfect recipe, creating a grocery list and finally getting to the store can keep any chef out of the kitchen,” said Janey Whiteside, chief customer officer, Walmart. “We’re excited to create a fun solution that feeds customers’ appetites to put time back in their busy schedules all while saving money with Walmart’s everyday low prices.”
According to Ben Kaufman, BuzzFeed’s chief marketing officer, the thing that is often standing between the customer watching the meal cooked on a video on their phone and preparing it for themselves, is the part where the ingredients have to be located and purchased.
“More than two-thirds of our audience has made a Tasty recipe and 90 percent of American live within 10 miles of a Walmart store, so we’re excited to build upon our partnership with Walmart and provide a new feature that will solve the pain point of grocery shopping and make it even easier for our audience to cook their favorite Tasty recipes.”
The new connection of the app to Walmart’s digital grocery shopping platform expands on a 2018 partnership the two firms struck that brought Tasty’s line of cookware to Walmart shelves nationwide.
Target Looks To Gather New Customers With New Grocery Goods
Target has announced it’s taking a more significant step into the world of private-label goods by launching its in-house grocery brand Good & Gather.
“We’ve been hard at work [on this] for the last couple years,” said Stephanie Lundquist, head of food and beverage at Target. “Food and beverage play such an important role for Target’s business … for the Target experience.”
The first forthcoming brand will hit store shelves on Sept 15, and Target has confirmed that the goal by the end of 2020 is to have upward of 2,000 items being sold by under the brand’s umbrella
The items will include things like milk, eggs, pasta, veggies, salads and organic pizza crusts. The move, Lundquist noted, plays to one of the brand’s “biggest strengths” as a one-stop shopping location for guests. She further stated that around 75 percent of customers will add at one food item to their baskets while shopping. Some of those customers are, of course, there to grocery shop. However, many aren’t — and are adding them opportunistically while they are doing other shopping — in a way that boosts basket sizes notably.
It is a segment that analysts believe Target has much potential in — but one where it may perhaps not been as proactive as it ought to have been.
“Grocery is the one spot in their stores they haven’t fixed yet,” Brian Yarbrough, an analyst at Edward Jones, said, “But they are in a much better spot than they were four or five years ago.”
The challenge, of course, is a lot of other players are also in a better spot in the grocery game than they were five years ago; and Target not only has to catch up but find a way to come from behind.
Kroger And Walgreens’ Expanding Partnership
Last October, Kroger and Walgreens announced a pilot in which customers at 13 Walgreens stores in northern Kentucky could order Kroger groceries online and pick them up at the drugstores. That partnership, according to reports this week, is expanding. Kroger is expanding the assortment of goods it is offering within Walgreens, as well as adding grocery pickup services to 35 Knoxville-area Walgreens. Also, Walgreens’ health and beauty products will now be sold within 17 Knoxville Kroger’s in what is essentially a Walgreens-bannered section mini-store.
Both of the tests will begin this fall.
“We continue to redefine the grocery customer experience and partner for customer value through our Restock Kroger transformation plan. Our growing relationship with Walgreens is just one more way Kroger is making life easier and better for even more customers because everyone deserves to have affordable, easy-to-enjoy, fresh food,” Jeff Talbot, vice president of new business development at Kroger, said in a statement.
“Expanding our pilot to Knoxville demonstrates the ongoing success and future potential of bringing together the best of Kroger’s food authority with Walgreens’ global expertise in health and beauty.”
The pilot is designed to offer what the two brands call a “fill-in grocery shopping experience,” which will include an assortment that might include things like fresh meat, produce and dairy, frozen foods, shelf-stable products and Home Chef meal solutions, depending on location.
Most locations will feature a full Kroger Express assortment of up to 2,700 products, with other stores offering an average of 2,300 products, the companies said.
Walgreens and Kroger have been gradually building out the partnership since it was announced last October — scaling up the services and goods offered at individual locations. The two retailers have referred to the ongoing experiment as “exploratory,” noting that the initiative enables them to elicit customer feedback and gain insights in a “test and learn” retail setting before they decide on whether to expand their efforts.
“Walgreens customers have responded very favorably to the Kroger Express pilot in northern Kentucky. As a result, we’re exploring more ways to offer customers an enhanced, more convenient shopping experience,” stated Richard Ashworth, president of operations for Walgreens. “Working with Kroger, we’re continuing to reinvent our customer offer to meet shoppers’ evolving needs, which includes offering private-label grocery and health products at a great value, through an integrated omnichannel experience.”
Speaking of forthcoming omnichannel experiences planned by the retailers.
Amazon’s Next Grocery Bombshell?
According to news reports out in The New York Times, Amazon’s grocery ambitions are bigger than Whole Foods alone. The eCommerce giant is reportedly in the design faces of a new grocery chain separate and apart from Whole Foods purposed with offering a more digital integrated physical grocery experience.
According to The Times, Amazon’s struggles to cut down Whole Foods prices and incorporate the chain into its logistics systems has motivated the company to explore a more fundamental redesign of the grocery concept itself. This rumor, notably, has come up more than once in recent memory. In March, The Wall Street Journal reported that Amazon is planning to open dozens of stand-apart grocery stores in the United States. The Journal further reported that the first Amazon grocery store was opening for business in L.A. by the end of 2019.
Amazon has been known to pull off a surprise or two in the past, but as of late August no official word on that has come out.
However, The Times, like The Journal before it, has noted that Amazon’s job posting for store designers have increased over the last several months. The posting spotted by The Times notes Amazon is seeking a candidate that is interested in “developing creative solutions” for a “retail concept” that houses “multiple customer experiences under one roof.”
According to The New York Times, grocery store 2.0 as conceived by Amazon would be centered around grocery pick-up and delivery — whereas the in-store shopping section where shoppers could pick out fresh groceries would be separated. The Times also cited a 2017 (pre-Whole Foods) internal memo that described a store concept where consumers would shop for fresh products, and order nonperishables items via an app. Their nonperishable would be brought to the checkout when the customer was done shopping. The Times report did not make it clear if this concept would still be operating.
Amazon as of yet has offered no comment on The New York Times report — or any of the flurry of stories it inspired.
However, given how busy everyone in the grocery segment has been over the last few weeks — and how avidly they’ve been building their omnichannel offerings, brand expansions and partner networks, it seems safe to say the rest of the field is paying attention.
And they are readying themselves for a potentially significant change of pace that could be coming down the path.
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