Strategies for Digital Groceries

Some thoughtful views on the topic.

A Strategist’s Guide to the Digital Grocery
As Amazon and Walmart disrupt the grocery industry, smart retailers can compete by plying their wares in a technologically enabled way.

by Tim Laseter, Steffen Lauster, and Nick Hodson  In Strategy + Business

Sometimes industries hit a tipping point. It looks like nothing is happening for a long time, while forces of change build up, and then everything shifts at once. That is happening in the grocery industry now. A shift is taking place in the most fundamental form of shopping: consumers’ purchases of food products and other basic household goods. The most visible signal of this shift occurred in June, when Amazon announced its acquisition of the Whole Foods grocery chain, but the basic trajectory was already long under way.

Central to this shift is the new digital grocery platform rapidly emerging in industrialized countries. In the U.S., Walmart and Amazon are each leveraging their scale advantages, but under different paradigms. Walmart has achieved unparalleled success with a “push” model that ships full truckloads of goods to more than 4,000 Walmart stores across the country, offering “everyday low prices,” as the slogan puts it, without sales or promotions. Amazon operates a similarly powerful supply chain but with a “pull” model that responds directly to customer demand by shipping packages rather than pallets of goods. The rest of the nation’s supermarkets and grocers must find a way to compete in this environment. Other industrialized countries have similar dynamics: traditional grocery competitors are squeezed between a “push” leader like Walmart and a digital native “pull” player like Amazon or Alibaba.  .... "