Future of Grocery is Omnichannel

 Clearly, but the how the sculpted elements of the supply chain, from supplier to store to door will require much technology and behavioral experimentation.

The Future of Grocery Is Omnichannel  in Supplychainbrain

October 6, 2020 By Michael Schedlbauer, Global Industry Manager – Grocery Industry, TGW

Which grocery shopping items are you willing to buy online or via click-and-collect? Most of us would be happy to order reliably uniform products, such as toilet paper, frozen vegetables or canned tomatoes, without choosing them off the shelf. But what about fresh fish, or potatoes? Maybe, if you trusted the retailer. Tomatoes and avocadoes, though, are probably a step too far. Most people would prefer to give them a good look-over in person, even a squeeze.

And yet, the growth in online grocery orders — whether for delivery or pick-up — is undeniable. Many consumers made it over the initial hurdle of establishing which online retailers to work with, and taking the time to set up an account, during the COVID-19 lockdowns. Now, they appreciate the gains in convenience and time-saving, and are continuing to shop that way, at least more than they did before. A recent McKinsey report predicted online grocery shopping could rise to more than 10% of the total by 2025, and commented that online grocery is supply driven. As online grocery retailers provide more online capacity and options, customers will adopt this new method of grocery shopping.

Grocery retailers are challenged with building flexibility into their supply chains to meet these new demands; thus we will see the future of grocery retail adopting omnichannel solutions. Consumer demands will continue to evolve in an environment where there is a wider choice of customer journeys, and the grocery industry must be ready to respond.  ... "

Wal-Mart is Growing

Though I rarely use them online, their stores are more impressive these days.  Apparently adjusted well to Covid.

Walmart keeps growing and growing and …  in Retailwire
by George Anderson in Retailwire, with expert discussion.

Walmart came out with its second-quarter numbers and the retailer did not disappoint investors. The chain reported that same-store sales, excluding fuel, were up 9.3 percent during the quarter and online sales jumped 97 percent.

Walmart’s strong performance followed a first-quarter for which it reported a 10 percent gain in same-store sales and e-commerce growth of 74 percent.

Speaking on Walmart’s earnings call with analysts yesterday, CEO Doug McMillon said the retailer benefited from tailwinds, including the federal government’s stimulus payments and more people eating at home. The chain also saw sales increase as customers spent money on products to entertain themselves in their homes and also to fix them up.

He also noted that reduced store hours and out-of-stocks in some categories had a dampening effect on sales. Walmart recently announced that it is moving its closing time from 8:30 p.m. to 10:00 in 4,000 of its 4,700 stores. He also said that the chain experienced out-of-stocks in some states where COVID-19 cases were on the rise.

Mr. McMillon said that the retailer has completed the integration of its store and online merchant teams as it continues on its “path to transform into an omnichannel organization.” The company pointed to improvements in online margins as an indication of a more balanced product mix and operational efficiencies it has achieved. ... " 

Wal-Mart and Spotify, Why?

Was exploring this and discovered one answer in Inc.

Walmart Just Made a Surprising Announcement and It's Very Bad News for Amazon.  Watch out, Amazon: Small businesses may now have more options for reaching customers with their online stores.   By Jason Aten  @JASONATEN in Inc.

Walmart isn't the type of company that makes surprising announcements, but on Monday, its partnership with Shopify was exactly that. The two companies said they will now make it possible for companies using Shopify to access Walmart's Marketplace at Walmart.com. 

This matters for a few reasons. The first is that as online shopping has surged in the past few months with retail shops closed, big companies like Walmart (and Amazon) are betting that trend will continue. Amazon recently announced that it would offer 125,000 temporary workers hired since March full-time positions moving forward as it adjusts to the shift in how consumers are shopping. ... "

Wal-Mart Teams with Shopify

Expanding online marketplace.   Note recent grounding of the Jet online service.

Walmart partners with Shopify to expand e-commerce 'marketplace' in Techxplore

US retail giant Walmart has teamed up with Shopify to expand its online marketplace of third-party sellers

Walmart said Monday it was teaming up with e-commerce platform Shopify to expand its online marketplace in a ramped-up challenge to Amazon for third-party sellers.
The deal allows the estimated one million US businesses using Shopify's platform to sell on Walmart.com without any listing fees.

"As we launch this integration with Shopify, we are focused on US-based small and medium businesses whose assortment complements ours and have a track record of exceeding customers' expectations," said Jeff Clementz, vice president of Walmart Marketplace.

"We're excited to be able offer customers an expanded assortment while also giving small businesses access to the surging traffic on Walmart.com."  ... "

Wal-Mart Grounding Jet.com

No new news, but some of the motivations provided of interest,    Would they have thought differently if they knew of the virus coming?  Will it fundamentally change how people buy?

Walmart to ground Jet.com
By Dan Berthiaume - 05/19/2020  in CSA

Walmart is winding down a digitally-native retailer it bought for $3 billion in 2016.

The discount giant will cease operating its Jet.com e-commerce subsidiary at an unspecified date. Walmart announced its intention to shutter Jet.com in a two-sentence statement in its first quarter earnings report: “Due to continued strength of the Walmart.com brand, the company will discontinue Jet.com,” Walmart said. “The acquisition of Jet.com nearly four years ago was critical to accelerating our omni strategy.”

On the company's quarterly earnings call with analysts, Walmart CEO Doug McMillion credited the acquisition of Jet.com as  “jump-starting the progress we have made the last few years.”  He cited the growth of Walmart’s curbside pickup, delivery to the home and expansion of categories beyond groceries, including apparel and home decor.  McMillion also said "we're seeing the Walmart brand resonate regardless of income, geography or age."  .... "\

On Behavior of Shoppers During the Pandemic

A  look at shopping behavior in SupermarketNews  Adds some understanding to current and future shopping behavior.   Online has not replaced in store shopping yet.

Most grocery shoppers choose stores over online during coronavirus crisis
Nearly half of consumers have paid more for a product, Harris Interactive/Toluna poll finds
Russell Redman 1 | Apr 20, 2020

The prevalence of coronavirus nationwide hasn’t kept grocery shoppers out of stores, and many are shelling out extra to get what they want, a new Harris Interactive/Toluna survey reveals.

Of 1,047 Americans polled between April 9 and April 14, 70% said they are still visiting stores to buy their groceries rather than ordering online, according to the latest Toluna and Harris Interactive COVID-19 Barometer, a biweekly index that taps into a community panel of 30 million consumers.

Related: More grocery shoppers making their first-ever online orders during pandemic

Survey respondents said the top purchases on their shopping list are frozen food (cited by 65%), cleaning products (56%) and toilet paper (53%). Those product categories remain among the hardest-hit in terms of grocery retailer out-of-stocks, and most respondents pointed the finger at shopper hoarding as the reason. Eighty-five percent of those polled blame shortages of items like hand sanitizer, pasta and toilet paper on other shoppers.

When asked how coronavirus lockdown measures have impacted their shopping, 60% of consumers reported they have gone without products or services, and 47% said they paid more for something than they normally would. 

Related: Grocery shopping behavior shifts into ‘home-confined buying’

“Despite the social distancing and government warnings to stay home, Americans are still shopping for their groceries in store, and if they can’t easily find what they need, they are willing to pay more,” explained Lucia Juliano, head of CPG and retail research at Harris Interactive and Toluna. “The survey also reveals that paper and cleaning products continue to top America’s shopping lists, which could explain why many stores and online retailers are experiencing shortages in these respective areas.”  .... "

Super Saturday vs Black Friday

Another look, with some numbers, with further expert comment and opinions from Retailwire.

Is Super Saturday rivaling Black Friday in importance? in Retailwire   by Tom Ryan

Super Saturday’s sales this year reached $34.4 billion, becoming the biggest single day in U.S. retail history and surpassing Black Friday’s haul of $31.2 billion by 10 percent, according to Customer Growth Partners.

The next biggest shopping days were Dec. 14 ($28.1 billion) and Cyber Monday ($19.1 billion). With only expedited shipping options left, Super Saturday tends to be more of an in-store than online event.

While foot traffic was down at most malls, the conversion rate, or the percentage of people who go to malls and make a purchase, increased, Customer Growth Partners said.

Super Saturday was expected to gain a boost from the compressed holiday selling season. The season saw six fewer days between Thanksgiving and Christmas and one less Saturday this year versus 2018.

NRF’s survey predicted 147.8 million planned to shop on Super Saturday in the U.S., up from 134.3 million last year.  .... " 

Comparison of Wal-Mart and Amazon as Online Retailers

Good review of the topic.  The details in the Why are interesting.

Walmart vs. Amazon: Which online retailer is better, and why  in Digitaltrends

Walmart vs. Amazon: Which has better prices, shipping, and customer service?
Back in the 90s, going out and physically shopping at the mall was a regular activity. You’d go there to shop for clothes, see a movie, grab lunch at the food court, or to grab that new CD you wanted from Sam Goody or Tower Records. Have you been to a mall lately, though? It’s nothing like it was back then. Most malls today are like ghost towns, with gates in front of many of the stores and few patrons shopping on any given day.

These days, so many of us do our shopping online. We can buy just about anything without getting off the couch, and have it delivered right to the front door. Two of the main players in the online shopping arena are Amazon and Walmart. Both have marketplaces, quick shipping options, and a wide variety of items ranging from electronics to clothing to kitchen gadgets to sex toys.

Walmart may be behind Amazon in terms of online performance, but the big box store has been rapidly growing its online customer base. Between early 2017 and early 2019, Walmart has seen 207% growth in its eCommerce buyer base. ....  " 

eBay Sponsoring Retail Revival

Seems tough direction to compete, small retailers will still look for the volume of traffic at Amazon.   See the article for more detail.   We visited eBay some time ago in this regard.

eBay looks to lead a ‘retail revival’  by Tom Ryan in Retailwire

EBay continues to expand its “Retail Revival” program that helps small businesses expand online, particularly on its platform.

North Carolina’s Greensboro just became the third U.S. city to take part in the marketplace’s program.

Small businesses in Greensboro can participate in a wide range of classes and receive ongoing support and perks from eBay during the year-long program. Resources include customized training on everything from properly listing and naming items online to photo facilities. The perks include a break on seller’s fees during the program and direct access to eBay’s customer service team.

EBay’s first Retail Revival effort launched in Akron, OH in January 2018, and others were deployed to Lansing, MI, Wolverhampton, UK and Halifax, Canada over the last year. Cumulatively, these cities have helped participating small businesses generate millions of dollars in sales and export to over 70 international markets, according to eBay.  ... "

Wal-Mart to Add 200 Technologists

Further indication that high tech is steaming in retail.

Walmart to Add 2,000 to Technology Group This Year
Bloomberg  By Emma Chandra; Matthew Boyle

Walmart anticipates the hiring of 2,000 technology experts this year in an effort to bolster both its brick-and-mortar stores and its online presence. The company is looking for data scientists, software engineers, designers, and others to work in nine offices worldwide to support Walmart's efforts to expand its online business and embed in-store technology, such as robots that scrub floors and scan shelves. Walmart's new digital tools include algorithms that help store associates pick online orders faster by mapping the optimal route through the aisles. The company’s recruitment efforts will expand its competition with Amazon over the best technology talent beyond Silicon Valley, where both companies have offices, and into emerging corridors like northern Virginia.  ... " 

Nike Sees Online Dominating

Retail continues to surge online ...

Nike sees online eclipsing offline sales   by Tom Ryan in Retailwire with further expert comment.

The standard defense to the “Retail Apocalypse” is research showing that online sales still make up less than 10 percent of all retail sales. But Nike just joined a growing crop of brands that now expects over half of its sales to eventually originate online.

On its second-quarter conference call last week, Andy Campion, Nike’s CFO, noted that at its Investor Day last October, Nike predicted that online revenue — both from its own and wholesale partner websites — would generate about 30 percent of its sales by 2023, up from 15 percent currently.   .... " 

Wal-Mart Soars, Plus Big Online Jump

The online move is a big deal.

Walmart soars with fastest sales growth in a decade, big online jump   By Marianne Wilson in CSA

Walmart showed its might in the second quarter, with earnings and sales that topped the Street amid surging digital sales and a jump in store sales.

The discount giant’s revenue rose 3.8% to $128.03 billion in the quarter ended July 31, beating analysts’ estimates for $125.97 billion. Same-store U.S. sales increased 4.5%, led by grocery, apparel and seasonal; foot traffic was up 2.2%. Grocery sales rose the most in nine years, helped by improved fresh-food offerings. Same-store sales at Walmart’s Sam’s Club rose 5%, the biggest increase in five years.

Walmart has been making significant investments online — from its improved e-commerce site to expanded grocery delivery options — and the results appear to be paying off. Online U.S. sales jumped 40% during the second quarter, and the retailer reiterated it is on track to increase U.S. e-commerce sales by 40% for the full year.   ... "

Online Grocery to Reach $100 Billion

Online grocery sales could reach $100 billion by 2022, researchers say    By Andrea Miller   ABC

Walmart plans on expanding grocery delivery to 100 metropolitan areas

Instead of taking a trip to a local grocery store, more and more consumers are opting to order essentials such as cereal, toothpaste or even apples from online retail giants.

Walmart, for one, announced Wednesday that it is bolstering its grocery-delivery service to reach even more cities. .... " 

Walmart and Google Pushes an Online Boost

Thoughtful podcast, but I think the final para here misunderstands Wal-Mart's customers, they are more sophisticated and widespread than they think.

Will Walmart’s Partnership with Google Give It an Online Boost?
Walmart has been going all out in the past year to grow its e-commerce business, and the latest move is a partnership with Google that it announced last week. According to Walmart, beginning in late September, it will offer customers “hundreds of thousands of items for voice shopping via Google Assistant” – the largest number of items from a single retailer available on the Google Express online shopping platform. While the Google partnership will certainly help Walmart drive online sales, it promises limited gains and doesn’t seem to be part of a larger e-commerce strategy, according to experts.

The stakes in the online shopping game are constantly rising, especially when it comes to taking on Amazon – which, with its recent acquisition of Whole Foods Market, is now encroaching on Walmart’s brick-and-mortar territory. “People feel competing against Amazon is a very tough proposition, and I want to see competition there,” said Wharton marketing professor Barbara Kahn.

According to Mark A. Cohen, director of retail studies and adjunct professor at Columbia Business School, the deal “doesn’t necessarily lead anywhere…. The intersection of Walmart’s customer base and Google’s users is so small that this is likely to be insignificant.”  ... ' 

Target Ignores the Obvious

Former colleague Bob Herbold writes about Target in his intriguing blog about gutsy retail readership.

Kroger Merges in-store, Online Shopping

From FMI Smartech: 

Kroger turns to Tech to merge in-store, online shopping
Kroger strives to create an in-store shopping experience that is similar to online shopping, tapping technology including infrared sensors, data algorithms, personalized mobile apps and e-commerce offerings including in-store pickup and delivery in an effort to make wait times shorter and foster an interactive shopping trip, according to CIO Chris Hjelm. Next up, the nation's largest supermarket will test smart shelves that can sense where shoppers are walking and send relevant offers to their mobile devices.

In The Wall Street Journal (Tiered subscription Model)

Wal-Mart and Jet

Podcast on Knowledge@Wharton:

" .... Wal-Mart this week brought more muscle to its competition with Amazon by buying online shopping site Jet.com. Wal-Mart Stores will pay $3.3 billion for the two-year-old Hoboken-based firm. Jet.com’s “gain sharing” business model revolves around persuading customers to bunch their orders and pass on the savings in shipping costs with lower price tags.

Opinions are sharply divided over the wisdom of Wal-Mart’s move. For many analysts, however, Wal-Mart’s eagerness to strengthen its online attractiveness is seen as the right driver to grow its business, even if its strategies to achieve that goal are debatable.  .. " 

Macy's Taps Etsy

Recently did my first shop at Etsy recently for quality handmade items. Nice, simple, online experience. Surprised a retail giant like Macy's would engage.  To engage Millenials they say.   In Retailwire.  Interesting comments on the approach at the link.

Loyalty Rewards Discounts Work better Online

More studies on loyalty in retail.  Also good comments.  Read the article details.

" ... With consumers typically not needing the incentive of a coupon to return to their favorite physical store, discounts from loyalty reward programs tend to be more effective in encouraging repeat customers online, according to a new university study.

Internet shoppers are "more variable," intently looking for bargains and less loyal to particular websites, writes Sanghee Lim, an assistant professor at Johns Hopkins Carey Business School in her study, "Loyalty programs and dynamic consumer preference in online markets," published in Decision Support Systems. ... " 

Metro Group and Alibaba

Visited and analyzed methods of the German Metro Group AG retail chain.  In particular their innovation center in Germany. They are the seventh largest retailer on earth.

Evan Schuman analyzes their recent deal with Alibaba, with good cautions for retail:

" .... Last week, one of the world's largest retailers cut a deal with Alibaba, China's global e-commerce giant. German retail chain Metro Group will turn over its online operation in China to Alibaba. Unfortunately, this is becoming a familiar tale in e-tail, it just about never ends well.

This kind of alliance only makes sense when the retailer doesn't mind surrendering the territory involved forever. Alas, retailers generally use these kind of deals in the opposite way — for extremely important segments, assuming they can move in directly down the road, after their partner has done the dirty work for a while. Gee, what's wrong with this picture?   .... "