How Supermarkets Could Compete And Win In Delivery

Articles
September 09, 2015

How Supermarkets Could Compete And Win In Delivery

Create a concierge service filled with special customer perks for an annual fee – cement relationships and cash flow.

There is no question that convenience lessens grocery-buying drudgery. Online ordering use is increasing daily. It’s one key reason why Amazon, Instacart and other food deliverers are attracting so much attention from shoppers and retailers. 

While supermarkets increasingly field their own versions of online ordering and delivery or pickup at the store, The Lempert Report views these services as largely dispassionate and functionary. We also believe many are priced too low to sustain, especially if they don’t do enough to incentivize bigger baskets. 

Welcome to the world of concierge food retailing!  

Supermarkets have a wide-open opportunity to differentiate with a more personalized service that cements relationships and loyalty, purchase regularity and larger transactions, because the mix would include favorite items of specific shoppers.  

Rather than chase logistics leaders in the ordering/delivery/pickup sector, supermarkets could leapfrog them with a premium service for an annual subscription fee, a la Amazon Prime. This concept isn’t appropriate for every store, but some early candidates we see are Mariano’s, Eataly, Wegmans, Whole Foods Market and Publix – because stores like these have the “more” to inspire shoppers to pay for a closer relationship filled with perks.

We’d model it loosely after the personal shopper model in luxury department stores. Done right, customers would get to know and trust their personal shopper, who’d give them an early heads up on special foods arriving, deals coming up on favorite brands, place special orders and be responsible for regularly assembling orders for pickup or delivery.   

These supermarket personal shoppers would become solutions providers and food counselors to their clients. They could serve as the store’s liaisons between customers and registered dietitians, chefs, beauty advisors and pet care experts. Their higher-plane relationship would lead to discussions and engagement with their customers about all things food (from farm to table) and make the process seem more fun and valuable – all the while leading the store to a more loyal shopper, a more predictable sales model, higher market share, and yes, even a cash infusion from the yearly subscription fees.