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Daily news and analysis about the food tech revolution

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Cashierless Checkout? No Salad Bars? What Will Grocery Stores Look Like After COVID-19

Even though we are nowhere near the end of this pandemic (though I hold our hope efforts to “flatten the curve” prove successful) I’ve started thinking about what everyday things will look like in a post-COVID-19 world. In particular, and because it’s my beat, I’ve been thinking about grocery stores.

Here in Washington state, the shelter-in-place order has been extended for another month to May 4th at the very earliest. This means that the Albrecht house at least, will continue to its grocery shopping online. We’re settling into new routines with different mail order subscriptions, delivery and curbside pickup offerings. Those habits are will likely become even more ingrained and our new normal. In other words, my physically going to the grocery store could very well move from minimal to almost not at all, even with a lockdown lifted.

But actually visiting a grocery store on the other side of this outbreak will undoubtedly be a different experience with the changes being implemented.

For instance, plexiglass shields are being installed at checkouts to better protect cashiers against human-to-human transmission of the coronavirus. It’s hard to imagine those coming down any time soon, or at all. Beyond COVID-19, there will still be cold and flu seasons, and this pandemic has (hopefully) put a healthy fear of viruses into the general population. I imagine those barriers are here to stay, and really, given all that grocery store workers are doing for us right now, that’s not a bad thing.

But perhaps this pandemic will accelerate the adoption of cashierless checkout, eliminating that point of human contact altogether. Just scan your phone as you walk in, grab what you want and leave, getting charged automatically. Previously, the big issues around cashierless checkout was the impact it would have on human jobs and access for the underbanked. The problems around equity will still need to be figured out, but perhaps if delivery and pickup become the new normal, those cashier jobs can migrate to other parts of the store.

Which brings up the question of what other parts of the store will there be? Most markets near me have closed down the salad and hot bars. People breathing (or coughing) near open food + serving utensils used over and over suddenly doesn’t seem like such a good idea. Will grocers become more like cafeterias, with an official store person ladling out your soup? Will there be more vending machine-like services dispensing food? Those don’t seem like dumb ideas.

And if we’re cutting down on reusable items, will the sanitizing of carts be automated? Will a cannister of wipes at the entrance enough, or will we see car-wash style drive thrus for carts and baskets?

Finally, how will we move about stores, especially when we don’t want to be too close to one another? If there are no salad bars, will regular aisles get wider? Kroger is testing out one-way aisles at one of its stores to help reinforce social distancing. While I haven’t tried it out, this is an idea I can get behind, especially when shopping during a pandemic. During my last trip to the grocery store in person, people were wandering the aisles haphazardly and not really paying attention. Granted, we’re all in a daze right now, but perhaps a few arrow decals on floors could add some order to the store.

I don’t know what the post-pandemic grocery store will look like, but changes are coming. What do you think will happen? Leave a comment below and share your opinion!

The Relish Stock Tracker Helps You Locate Hard to Find Grocery Items

The Spoon’s North Star during this time of pandemic has been ‘how can we be of use?’ Well, you’d be hard-pressed to find something more useful for a nation desperately searching for toilet paper and bread flour than the Relish Stock Checker.

Launched today by Relish, an online meal planning and grocery shopping tool owned by Fexy Media, the Relish Stock Checker is a free tool to help you locate 50 of the hardest-to-find grocery staples (think: paper towels, pasta, sugar, canned beans, etc.) at nearby Targets and Walmarts. Just enter your zip code and the Relish Stock Checker will help you see which store locations in your area have these items in stock.

While stores are returning to normal after a bout of pandemic-induced panic shopping, there are still empty shelves for many of the staples people need to stock up on. In a time when actually going to a grocery store can potentially expose you to others with COVID-19, knowing ahead of time if a store has the item you need can help reduce risk by cutting wasted trips.

We don’t know how up-to-date the Relish Stock Checker is (Relish is tied into Walmart and Target’s APIs because of its shoppable recipes). Even Walmart and Target’s websites can be out of date by the time you actually get to the store. But at least Relish is providing some indication of available stock, and lets you aggregate results from both Walmart and Target without having to go to their sites individually.

The other bummer, if we can even call it that in these crazy times, is that Relish Stock Checker only works with Target and Walmart. In the press announcement, the company says that it will be adding more locations and grocery items in the coming weeks. There will even be a module where shoppers can submit suggestions for items they want to find.

Once the company does that, the Relish Stock Checker will be even more useful.

Just in Time for Sheltering in Place, Anycart Launches its Shoppable Recipe Service

One of my wife’s greatest talents during this time of sheltering in place is her ability to make actual meals from whatever we have in the pantry. This may sound mundane, but given the state of the world, our pantry is stocked with lots of dry and canned goods at the moment and last minute one-off trips to the grocery store aren’t in the cards.

If you’re stuck in a similar situation, you may want to check out Anycart, a new online shoppable recipe service that launched in the U.S. over this past weekend.

Instead of shopping for individual food items, Anycart lets you shop for meals that appeal to you and your family. Those include Easy Chicken Swimming Rama, Chicken Thighs with Hummus and Cucumbers, and Homemade Easy Mac and Cheese. Select the meal you want and all the ingredients for it are sent to a participating grocery store near you (Safeway, Albertsons, etc.) for fulfillment and delivery or pickup.

This is where meal shopping in the age of COVID-19 is a double-edged sword. More of us are shopping for groceries online more than ever, but that also means grocers can be overloaded, especially for delivery. Case in point: I tested Anycart this morning, picking meals and designating a Safeway as the fulfillment location. Anycart said my order would be delivered sometime between today and Saturday (with some caveats to get them out of fulling committing to that time). However, a quick check on Safeway (and personal experience with my local store) shows it doesn’t have any delivery times available until after Saturday, April 5. The only pickup option for me was an hour away .

This is partially a quirk of the more rural area where I live , but delivery delays are probably not uncommon as online grocery orders surge in this time of staying at home. Part of the appeal and promise of shoppable recipes is that you can be inspired by a new type of cuisine and then act on it. But if there is a huge delay between inspiration and action, then the shoppable recipe loses some of its lustre. That Caprese Grain Bowl with Avocado might sound good on Monday, but if you can’t make it until Saturday, you palate might have moved on.

The whole shoppable recipe space was pretty hot a couple years back with Fexy Media and Myxx providing similar offerings, and BuzzFeed’s Tasty partnered with Walmart for shoppable recipes last year. But it’s not a space that we hear a lot about or see a lot of action. Perhaps if the grocery e-commerce boom we are currently in sustains beyond this time of sheltering in place, shoppable recipes will become more central to the e-commerce experience. Who knows, even my wife may start using them.

31 Percent of U.S. Households Used Online Grocery in the Past Month

Nothing like a catastrophic global pandemic to force people into new behaviors. According to a survey released yesterday by Brick Meets Click and ShopperKit, online grocery shopping is booming, with 31 percent of U.S. households (~39.5 million households) saying they have used either an online grocery delivery or pickup service in the past month. (h/t Grocery Dive).

The results of this survey, which was conducted from March 23 – 25 with 1,601 U.S. adults, is more than double the number Brick Meets Clicks found in its August survey that found 13 percent of U.S. households grocery shopping online.

Interestingly, 26 percent of those surveyed are doing online grocery shopping for the first time. For shoppers 60 years and older, that number of first time users jumps to 39 percent.

The COVID-19 pandemic, coupled with shelter in place orders and social distancing, is driving a lot of this sudden spike online grocery usage. The question is whether these e-commerce newbies will stick around once the outbreak recedes. Brick Meets Clicks actually dug into this and found:

When asked how likely they were to continue using a specific online grocery service after the COVID-19 crisis subsides or ends, 43% of the survey respondents indicated that they are either extremely or very likely to do so.

That many people saying they will probably stick with e-commerce makes me think that consumers are being extra forgiving with delayed delivery times and out of stock items at the major retailers in this time of mass hoarding.

The trickier part in getting all of the data going forward is the fact that this pandemic doesn’t have a hard end date. It will be amorphous and the extent to which social distancing measures are kept in place could depend greatly on where you live and your perceived threat.

Regardless, this outbreak is forcing people into all kinds of new behaviors, and now we have numbers to show that online grocery shopping is among them.

COVID-19 Got Shoppers to Order Groceries Online, but Will They Keep Coming Back?

As COVID-19 has forced shoppers indoors, the growth curve of online grocery has suddenly accelerated, with downloads of popular grocery apps increasing by as much as 2000%. Shoppers who were previously hesitant to buy groceries online have found themselves now doing so out of necessity. It’s a bittersweet victory for online grocers who have long struggled to gain real traction.

But as the old adage says, “this too, shall pass.” The current crisis will subside, and when it does, it’s anybody’s prediction if grocery shoppers will retain their newfound affection for buying foodstuffs online. I believe that the outcome of that question will be determined by the kind of customer experience that online grocers deliver to shoppers now.

Here are three levels of effort that online grocers might want to focus on to make sure that experience will keep bringing shoppers back after the crisis has passed.

1. A functional platform and robust delivery capability is crucial

Online grocers with holes in their game need to scramble. They had better eliminate technical glitches, ensure that their back-end can support purchases in large volume, secure agreements with suppliers for gluts in demand, and validate that their pickup and delivery services are built to flexibly scale.

Even some very established players have seen troubles during this spike of new traffic. British online grocers like Ocado and others came face-to-face with this problem recently, as sites and apps repeatedly crashed under the weight of new users. Some ultimately had to turn new customers away, or create “virtual queues” just to use the service. Morrisons quickly updated its payment terms to make sure that deliveries from small suppliers would not be stymied by cash flow problems.

American retailers have rather famously faced logistics problems. Instacart, Amazon and others have been unable to meet their typical delivery commitments while Walmart, Target, and Amazon are all facing severe inventory problems on high-demand items.

While it’s understood that these are unusual times, online grocers should take a lesson and develop contingency plans for higher traffic. It’s a good time to take a hard look at both the technology and the support systems that you will need to service your new customers.

2. Make sure your shopping experience is easy 

Adoption of online grocery shopping to date has largely been driven by tech-savvy millennials. Provided that your online grocery shopping website and app have a half-decent user interface, these young shoppers will natively understand how to navigate them. But that may not be so true of those who have hopped on the bandwagon recently. Either way, ease and enjoyment of the online shopping experience can make or break loyalty to your online platform.

If your online shopping experience is not already as easy and smooth as it could be, now’s the time to change that. Products must be easy to find through search functions and intuitive shopping categories. Consider carefully how you are organizing product by category and sub-category, by brand, price, and even by lifestyle or dietary choices. Think about how to best present holiday and promotion items. If shoppers feel that it is difficult to find what they want, they’ll soon switch back to what they know.

Don’t neglect sign-up, check-out, and re-order, either. Think of online grocery as a means to “always have the customer in the store.” You can make shopping easier by proposing automatic delivery of common staples each shopper routinely purchases. The more seamless these routine functions are, the more customers will appreciate the convenience of shopping online.  

3. Make online shopping about personalization, imagination and discovery  

So what about online grocers who already have a functional platform that makes it easy for shoppers to get what they need? If you are one of these grocers, you are positioned to create not just a functional shopping experience, but an extraordinary one. Online grocery should not be just “a store on a website.” By making your online platform emulate something that it is not, you’ll miss out on making it something much better.

That something should include smart, personalized recommendations to customers. When a shopper puts fresh chicken breasts, bouillon cubes, and vegetables in their cart, you could recommend egg noodles for the chicken noodle soup they are making, but you could also suggest freshly squeezed orange juice or hot tea, honey, and ginger for whoever is nursing a cold. That vegan shopper who is always buying garbanzo beans and tahini will probably appreciate you suggesting the imported middle-eastern spices that just came in. And for that customer you know is looking to shed a few pounds, you could prioritize delicious, healthy foods that help him or her choose wisely. 

Henry Michaelson | Co-Founder, President & CTO at Halla 
While studying computer science at UC Berkeley, Henry co-founded Halla, a taste intelligence company that enables retailers to predict the personal preferences of their shoppers, all in real time. He is responsible for constantly improving Halla’s machine learning algorithm and for internal leadership, especially with respect to technology. Henry’s previous projects include machine learning based classification of supernovae in the UC Berkeley Astrophysics department, a speaking role in the Warner Brothers blockbuster comedy Project X, a three year stint as lead guitarist for Joe Banks, and a patented algorithm that has distributed over $7M in awards to mobile gamers.

As Online Grocery Shopping Surges, Walmart Leads the Retail Pack (and Could Stay There)

With COVID-19 limiting movement in some cities and raising new concerns about being out in public among groups of people, there’s been a surge in online grocery shopping. And according to a piece in Bloomberg yesterday, Walmart was the top destination for online grocery shopping, which could translate into being the long-term leader in the space.

Bloomberg writes:

As online grocery shopping goes mainstream, Walmart will be the main beneficiary. One-third of shoppers surveyed by Gordon Haskett Research Advisors on March 13 said they bought food online over the past week, and of those, 41% were doing so for the first time. For those newbies, Walmart was by far the most popular option, capturing more than half of orders. Amazon and its Whole Foods chain garnered only 14%.

Now we don’t know how big the sample size of this survey was, but the results seem in-line with what we would expect. Walmart is a massive retail operation with a broad distribution of physical stores, so it makes sense it would be a big beneficiary of our current situation.

Prior to the global pandemic, Walmart and Amazon had been locked in a heated battle for supremacy in the online grocery space. The two retail giants exchanged tit-for-tat moves over the past year: Walmart launched and rolled out Delivery Unlimited for groceries nationwide, Amazon waived delivery fees for its Prime members, Walmart started testing its own Amazon Prime-like membership service, and Amazon started building its own physical grocery store locations.

Walmart already having physical locations definitely gives it an advantage in this time of social distancing. Walmart stores are there for people brave enough to actually go out and shop in person. The stores also act as a distributed network for home deliveries, or can provide pickup locations for online orders.

I myself am putting this last scenario to the test. I live in a more rural area and while delivery from my local Safeway couldn’t be fulfilled for more than a week and a half at the time of ordering, I can do an at-store pickup from Walmart tomorrow. Aside from a couple of minor hiccups, the Walmart app and online experience was pretty easy. Most everything I wanted was in stock, and if it wasn’t, they made it easy to swap.

As more people are forced into online grocery shopping for the first time they will go to where they can get the food and supplies they need in a timely manner. With Amazon struggling to keep up with delivery demand, Walmart, with its network of stores could become people’s de facto preference. And once they have an account set up with Walmart, re-stocking pantries will be that much easier as this lockdown continues and into a time in the hopefully not too distant future when we can emerge from our homes.

Online Grocer Farmstead Seeing 70 Percent Growth, Doubling Headcount to Keep Up

Farmstead has suddenly found itself on the front lines of the COVID-19 epidemic. The online grocer is based and delivers only in the Bay Area, where a shelter in place order was recently put into effect. As a result a lot of people are ordering food online and Farmstead, which has been around for a couple of years, now finds itself struggling to keep up with demand.

I spoke with Pradeep Elankumaran, Farmstead Co-Founder and CEO this morning, and he told me that back in normal non-coronavirus times, his company had at best 10 to 12 percent week over week growth. Three weeks ago, when the severity of the situation started settling in, that number jumped to 40 percent week over week growth. The following week was 50 percent wee/week growth over that. In the third week of the, should we call it a “panic?”, Farmstead’s week/week growth was 70 percent.

That is a lot of growth in a very short amount of time. Farmstead is currently doubling its headcount of pick-and-pack workers and delivery drivers to keep up, going from 70 workers to 140.

Farmstead’s hook has always been its AI-powered inventory management. The company builds microhub distribution centers in neighborhoods and uses its algorithms to make sure each one has just enough stock: not too much so that some goes to waste, and not so little that orders can’t be fulfilled.

Elankumaran said that even with the spike in demand, his software has been mostly effective at adapting and managing the situation. He attributes that success to a couple of key parameters that go into its algorithm. First, when you order from Farmstead, you don’t know if an item is out of stock until after you click on it (other online grocers will grey out an item when it’s gone so you can’t even click). While this is a wasted click for the consumer, it gives Farmstead more data on what consumers actually want, which allows the company to continue to feed its system.

Second, Elankumaran said that the sell by date for every item in the store is listed. That way they know how long each item they have will last and can prioritize distribution accordingly.

Farmstead’s system can’t totally prevent items being out of stock. During the first week of the outbreak, it sold out of pasta, for example. But because Farmstead knew everything people were trying to buy (even if they couldn’t) and how long that item lasts, they were able to adjust accordingly for the subsequent weeks.

Another side effect of the COVID-19 shopping, Elankumaran said, was that people are buying more fresh produce online through Farmstead. Buying fruits and vegetables online was something people typically didn’t do as they like to be in the store to look at and touch items before buying them. But when you are on lockdown, any safe port in a storm and all that. Plus, people may be waking up to the fact that between store workers and other shoppers, each piece of fruit could be touched by a lot of people while sitting at the store.

The fact that Farmstead doesn’t have an actual store that’s open to the public could also benefit the company. It’s a warehouse so the only people touching your food are the workers there, which is something Farmstead can exert greater control over.

As we’ve talked about before, COVID-19 is forcing new behaviors across the meal journey. While sudden demand is putting a strain on Farmstead and other grocery delivery services, these companies will adapt, and presumably work out the wrinkles in order to stay alive, and perhaps create a new normal in the way people shop for food.

Study: Online Grocery Shopping Could Help Alleviate Food Deserts

A study out from Yale University this week found that online grocery shopping could help people in food deserts get access to more healthy food choices.

The study, led by Eric, J. Brandt, MD and titled Availability of Grocery Delivery to Food Deserts in States Participating in the Online Purchase Pilot, looked at the eight states that are part of the Online Purchase Pilot (OPP) provision of the 2014 Farm Bill that allows people on the Supplemental Nutrition Assistance Program (SNAP) to purchase groceries online. That online buying provision could go nationwide after the trial ends in 2021.

From Yale’s study:

Among 8 states participating in the USDA’s OPP, online grocery purchasing and delivery services were available to more than 90% of urban food desert census tracts and SNAP households within them, but these services were rarely available in rural food desert census tracts. Our results suggest that existing grocery delivery networks, when combined with online grocery-purchasing, could potentially strengthen access to groceries in many areas where it is most lacking. However, grocery delivery fees are not covered by SNAP and may deter online purchasing.4 To help maximize OPP benefits in food desert census tracts, the USDA could consider extending SNAP benefits for both online grocery purchasing (as in the OPP) and delivery, although rural areas may be least affected.

The eight states examined were Alabama, Iowa, Maryland, Nebraska, New Jersey, New York, Oregon, and Washington.

Brandt’s study is coming out at the same time the Trump administration is looking to tighten rules around who can receive SNAP benefits. Just today, the Department of Agriculture gave final approval of that would kick 755,000 out of the federal food stamp program. As The New York Time reports:

The rule, which was proposed in February, makes it more difficult for states to allow able-bodied adults without children to receive food assistance for more than three months out of a 36-month period without working.

Thankfully, for those on the SNAP program living in a food desert, All_ebt is a startup that can help facilitate online grocery shopping. All_ebt uses a combination of Facebook Messenger and virtual Visa cards that allow people to purchase SNAP approved items online (though there is still the matter of the delivery fee). Earlier this year, during the government shutdown, All_ebt also released budgeting tools to help those on SNAP manage their money.

While online grocery shopping is still a small part of overall grocery purchases, retailers are putting in the infrastructure to make ordering and fulfillment faster and more automated. Things like robotic micro-fulfillment promise to turnaround online orders for delivery faster. If more people in food deserts can get groceries delivered same day, that’s more revenue for the retailer. More importantly, it can mean an easier way to a healthier life for those living on SNAP.

As Brandt told Yale News “If you live in a food desert, online grocery delivery really stands out as a way to get healthy food that potentially can save your life.”

Amazon Confirms Grocery Store, but Questions Remain

After months of speculation, CNET confirmed this morning that Amazon is indeed getting into the grocery store game. Despite this confirmation, however, many questions remain.

Here’s what CNET discovered so far:

  • The first Amazon grocery store will be in Woodland Hills, CA near Los Angeles
  • It is opening in 2020
  • This store is different from Whole Foods
  • The store won’t use Amazon Go’s cashierless checkout tech, so you’ll have to wait in lines

We don’t know what name the store will have, or what the selection and pricing will be, or if there are more stores on the way. Earlier reports have suggested that this Amazon store could carry the types of items that Whole Foods doesn’t (e.g. a can of Coke or a box of Twinkies).

Amazon’s bid to build its own grocery stores comes at a time when it is aggressively battling the likes of Walmart, Target and Kroger for a larger piece of the $800 billion dollar US grocery market. According to earlier research, Amazon already leads its competitors in online grocery shopping, but most of that is through Amazon proper, not its Amazon Fresh grocery brand, and those shoppers tend to spend less than shoppers spend at Walmart.com.

Last month, Amazon made delivery of online grocery orders free for all of its Prime Members, and the addition of its own line of groceries stores would give the company more options for customers like curbside pickup.

But right now, online grocery shopping remains a small percentage of overall grocery spending, as people still like to look and touch produce and proteins before they purchase. Having a real world retail store would give Amazon tons of data and insights about who shops and when, how they move through a store, what they buy, what they don’t buy etc. All of this can be leveraged by its already massive retail platform to get you to ultimately buy more, buy more groceries online, and buy more groceries from Amazon.

Study: Online Shopping Now More Than 6 Percent of U.S. Grocery Spending

Another study shows that while online shopping remains a small percentage of overall grocery shopping in the U.S., it is growing. According to analysis released yesterday by Brick Meets Clicks, in 2019 online grocery sales have grown 15 percent year-over-year and now represent 6.3 percent of total grocery-related spending by US households (h/t Food Dive).

In the press release announcing its findings, Brick Meets Click attributed the growth to the following factors:

  • Household penetration, based on past-month shopping activity, has risen more than five percentage points over the last year to nearly 25% of all US households. This gain is largely the result of aggressive expansion of home delivery and pickup services available at brick-and-mortar stores, which collectively are now accessible to 90% of all the households in the US — up from 81% in 2018.
  • Average order values, encompassing ship-to-home, home delivery, and pickup orders, have climbed over 6% to $70 in 2019. When only analyzing home delivery and pickup orders across various retail trade channels, the average order value grew 13% to just over $100.
  • Online purchase frequency for groceries remains relatively unchanged versus last year, averaging two orders during the past month for active online grocery customers. Ship-to-home orders account for 50% of all online grocery orders while pickup captures 28% and home delivery 22%, respectively.

 

One study doesn’t make a trend, but the results are in line with other recent market research. A Gallup survey released in August showed that 81 percent of Americans never buy groceries online. But the number of “nevers” was less than the 84 percent Gallup found in 2018. And in May, Coresight Research found that 35 million more people shopped for groceries online between 2018 and 2019.

While not exactly swift, online grocery shopping is a movement that will accelerate over the next couple of years as retailers build out the infrastructure to facilitate it.

Just yesterday, Walmart announced that it was expanding its $98/year Delivery Unlimited service to more than 50 percent of the U.S. by the end of this year. Also yesterday, Kroger officially announced that Dallas would be the location for its fifth robot-powered smart warehouse for faster grocery fulfillment. The company has plans to build out 20 such facilities across the country over the next two years. And just a couple of weeks ago, Target announced its curbside pickup service is now available in all 50 states.

As these services and facilities continue to expand, online shopping will become more economical and convenient. Expect to see continued adoption and those online shopping percentages grow by bigger leaps and bounds.

Walmart Rolling Out its “Delivery Unlimited” Grocery Service Across the Country

Walmart announced today that it will be expanding its $98 “Delivery Unlimited” grocery delivery service to 1,400 of its stores later this fall, and will reach more than 50 percent of the U.S. by the end of the year.

The Delivery Unlimited program lets customers pay $98 a year or $12.95 monthly to get unlimited Walmart grocery delivery orders without paying the $9.95 delivery fee per order. A pilot of the program launched earlier this year in Houston, Miami, Salt Lake City and Tampa and will now expand to the 200 metro areas where Walmart’s grocery delivery is available.

Online grocery shopping is still a small fraction of the overall grocery shopping market. A recent survey from Gallup showed that 81 percent of Americans “never” order their groceries online. But that stat actually represented year-over-year growth in online grocery shopping, especially among families with kids under 18.

This growth is the reason all the major retailers are investing in ways to facilitate and expedite online grocery shopping. Target offers a similar delivery subscription through its Shipt service, and Amazon, of course, has its Prime membership.

Walmart partners with a number of different grocery delivery services including Deliv, DoorDash, Point Pickup, Skipcart, AxleHire, and Roadie. Additionally, Walmart launched its own delivery service called Spark towards the end of last year.

And if you can’t be home when your groceries are delivered, Walmart will be happy to upsell you on its Walmart InHome service where delivery people bring your groceries into your house when you’re out and place them in your fridge (with your permission, and livestreamed so you can watch). Though that service is online trialing in Kansas City, MO, Pittsburgh, PA and Vero Beach, FLA.

Walmart already leads the pack in online grocery shopping, and by expanding its Delivery Unlimited the company is poised to extend that lead.

This Chart Explains Why Grocers are Investing in Logistics and Delivery

We write a lot about automation in the grocery industry. Kroger is building out robot-driven smart warehouses and self-driving delivery. Albertsons is testing out micro-fulfillment centers. Walmart is trying out, well, all of the above. If you’ve ever wondered why retailers are investing so much in logistics and fulfillment, the answer is summed up nicely in the following blog post from data analytics firm Second Measure (h/t TechCrunch):

Most Americans regularly shop at just one or two grocery stores, so it’s not surprising that most online grocery shoppers also stick with their favorite service. This is in contrast to the meal delivery industry, where diners frequently hop between apps to get the broadest selection of restaurants.

With the exception of Instacart, no grocery delivery company shared more than 9 percent of another company’s customers in the second quarter of 2019.

Second Measure even provided this handy chart to illustrate how for grocers, maintaining loyalty is the name of the game.

Second Measure also found that 12 percent of grocery shoppers have tried online grocery shopping, and that number is up from 9 percent from June 2018. These results echo other recent market surveys showing that the number of online grocery shoppers is growing.

If grocery shoppers are loyal, and more of them will be shopping for their groceries online, then retailers who want to retain their customers over the coming years need to invest now in logistical systems to fulfill those orders. Hence automated warehouses and micro-fulfillment centers in the backs of stores. As those processes are automated, they can be tied into other investments grocers are making around delivery and curbside pickup. The faster a grocer can get you your order in a manner that fits your schedule (delivery or pickup), the more likely they can keep your business.

Walmart seems to be off to a good start. Second Measure also found that Walmart has already taken a big lead in online grocery shopping. As of June of this year, the mega retailer had 62 percent more online grocery customers than its closest competitor, Instacart.

It’s said that dominance perpetuates itself, in the case of Walmart and online grocery shopping, that certainly seems to be shaping up to be the case.