Grocery Retailers Are Depending on E-Commerce: Here’s A Tip for RDs
By RDBA CEO, Phil Lempert
Dark stores, 15-minute and autonomous vehicle delivery expansions, ghost kitchens and backroom robotics are all changing the world of grocery retail. Your senior management is focused on ways to reduce labor and increase operational efficiencies as grocery prices continue to soar, transportation challenges continue, and front-line worker wages make the headlines.
While we can argue the exact numbers, in 2021 grocery e-commerce sales accounted for approximately 9.5% of total grocery sales. Estimates vary – but many forecast the growth to reach 20% by 2025. The c-suite is smiling, because if that happens and shoppers continue the move towards ordering on-line and scheduling a store pick-up (instead of delivery) grocery e-commerce could actually become a profitable business. While no one seems to be willing to share their exact numbers, grocery pundits estimate that on average, each grocery delivery order today shows a loss to the grocery retailer of approximately $10. Not quite a sustainable business.
Many retail dietitians have pushed hard to earn a place in their e-commerce operations: insuring accuracy of ingredient and nutritional information, adding “healthier” swaps, posting better for your recipes in video and test formats and even going as far to pushing their IT folks to include tools for disease management, allergens, and dietary preferences.
Well done. But I’d like you to think of these as just the beginning.
Yes, I am old school. I admit it. I got my start working for my dad selling cheese and meats in the wholesale markets of New York – Hunts Point, Newark, Brooklyn, as well as in the waiting rooms (wish I had those countless hours back) of New York metro retailers. Those experiences and years taught me well. Every moment I had was spent walking the aisles in the supermarkets in the Tri-State area. To learn, to watch and talk to shoppers – about what they wanted and frankly, in many cases, were not able to find.
Fast track to e-commerce. To fully understand your store’s e-commerce proposition, value, and user experience you have to immerse yourself. Many have ordered online for the convenience – but have you been critical of the experience and looked to just where it could be improved? And how about going a step further? Ask to work the front lines of e-commerce: pick the orders, pack them for pick-up and delivery, go on deliveries and understand the complete customer journey (and the glee and despair of your shoppers when they get their order) and be the person who brings the groceries to shoppers’ cars for pick-up.
It’s a tremendous learning experience that will not only immerse you in e-commerce, but also highlight your commitment to navigating the future of retail.
One of my mentors (and I am fortunate to have many) was Morty Wolfson -- who owned the Lincoln Park ShopRite in New Jersey -- taught me a valuable lesson. Morty’s job, he said, was to talk to shoppers. He stood at the entrance or courtesy counter, greeted, and spoke with as many shoppers each day that he could. He asked questions. He learned what they liked and wanted. He found out what they didn’t liked and corrected it. His son Larri, now CEO of the fourth-generation retailer does the same thing. It’s one of the best supermarkets in the country.
Make yourself relevant to the evolution of your grocery business.