How Grocers Can Bite Back
Online delivery and meal kit services such as Blue Apron are changing the landscape. But traditional grocers can capture more of consumers’ path to purchase with ‘grocerants’ – part dine-in experience, part traditional store.
The rise and convenience of e-commerce
Not only has it become easier for consumers to shop anywhere with their devices, but the delivery time and cost of shipping continue to provide better value in their favor. Discounted shipping and speedy deliveries have historically been used for traditional gift items like apparel,
Along with Amazon’s Prime Now service, several internet retailers have entered the grocery delivery space, including AllSuperStore and Netgrocer. Traditional supermarkets are still attempting to compete with these new entrants: Whole Foods and Safeway are among some of the chains now offering an online delivery service. Additionally, companies like Blue Apron, Plated and even Martha Stewart now deliver meal kits, which include recipes,
With the online grocery delivery market quickly becoming crowded with new entrants, supermarkets have been forced to look for new ways to keep their foot traffic up. One developing
Grocerants have been around for several years, to various degrees. In my hometown of Dallas, I frequent Eatzi’s, a store I would classify as “grocerant- lite.” It offers mostly prepared meals, along with limited seating to eat outside. However, its selection of more traditional grocery staples, such as fresh produce, is limited. What attracts me to Eatzi’s is the convenience. I can stop by after work and purchase a few meals to eat throughout the week, or order a sandwich or salad with a friend and then immediately sit down and enjoy our meals together. What would save even more time would be the ability to purchase a couple of prepared meals (that I could choose to eat on-site or take home), in addition to fulfilling my grocery list, all in one location. With a Whole Foods recently opening near my house, my shopping behavior has already started to change, as its grocerant concept fulfills all of these needs.
Convenience is the connecting theme that grocery marketers can seize upon by developing more integrated grocerant concepts to drive more shoppers into their stores. Online delivery of groceries and meal kits, while offering the luxury of not having to leave home, still requires a waiting period, no matter how short it may be. Supermarkets embracing grocerants give their consumers one destination for the immediate satisfaction of not only shopping for their food
From 2013-2016, U.S. sales from eating out at food and beverage locations increased 21% to approximately $659 billion, and they are expected to grow even higher. The rise of this segment indicates the popularity of paying for prepared meals. Over the same time, all U.S. grocery store sales have only risen 10%.
Adapting the grocerant concept gives brick-and-mortar supermarkets an opportunity to gain a portion of the dining-out
Tom Colven is the Senior Analyst with Alliance Data Strategic Insights Group. He can be reached at Thomas.Colven@alliancedata.com.