Show more urgency in home food delivery

April 22, 2014

Laggard efforts in ‘online delivery’ or ‘click-and-collect’ could cost supermarkets dearly.

Are supermarkets becoming more like the U.S. Postal Service?

It’s a harsh question, we know. Yet The Lempert Report has seen grocers abdicate significant volume to alternate channels through the years, simply because they were slow to identify consumer trends and serve up what people want, when they want it, and how they want it.

Sounds similar to the Post Office losing ground to UPS and FedEx.

And history is ready to repeat itself once more – if supermarkets collectively fail to compete in the online delivery field.

We’ve written repeatedly about Amazon and AmazonFresh efforts to shape an effective and profitable online food delivery model - as well as a bevy of approaches from Instacart, Google and ShopRunner, plus Peapod, FreshDirect, Walmart and other chains. Fact is, however, the grocery channel is sluggish on this matter. Most food retailers haven’t revealed what they may do – even though it seems increasingly clear to us this service will be essential soon, especially to please urban consumers.

If supermarkets prioritize online delivery and click-and-collect strategies and infrastructure today, they may well reap competitive advantage in a growing sector. IBISWorld predicts 9.5% annual growth for online grocery shopping to $9.4 billion in 2017, up from $6 billion in 2012.

That sounds a lot better to us than waiting to partner with the Post Office. According to an account in Food Logistics, Nagisa Manabe, the chief marketing and sales officer for USPS, told the PostalVision 2020 Conference that home refrigerators will automatically reorder foods by 2020, and the Post Office, collaborating with grocers nationwide, could deliver those foods.

She is an accomplished marketer with food in her background. Yet six years seems an eternity in this space, which will be much further refined by 2020. We urge the Post Office to detail its food-delivery plans much sooner than that, in order to be considered as a serviceable partner with supermarkets. Meanwhile, grocers must prioritize this today in ways that make sense for their trading areas.