Omnichannel Operations are Disrupting the Grocery Industry
With the recent purchase of Whole Foods, Amazon is among the toughest competitors in today’s market place. Bookstores were the first to feel the weight of Amazon; now grocers are the ones topping the list of those that fear the online giant the most.
While Whole Foods was ranked #9 among grocers in 2017, it has managed to climb up to #7 so far this year under the Amazon umbrella according to Progressive Grocer Market Research. That ranking is only expected to ascend closer to the top as they continue to disrupt the grocery market in the next few years.
It was widely reported that Amazon’s U.S. grocery sales for the first quarter rose nearly 50%, to an estimated $650 million.
So what can grocery retailers learn from Amazon? A lot. To give you a hint, here’s what Amazon has accomplished just this past year to grab headlines (and sales) in food retail:
- Lower prices
- Debut of check-out free Amazon Go
- Special deals on select items for Amazon Prime members
- Free grocery delivery for Prime members through Whole Foods stores
- Inclusion of Whole Foods products via Amazon Fresh, Amazon’s grocery delivery service
- Installation of Amazon lockers in Whole Foods
- New loyalty program in the works that will integrate with Amazon Prime
This is disrupting the grocery industry as we know it, but retailers aren’t just sitting back! The top three grocery chains, Walmart, Kroger and Albertsons, have begun to up the ante on their omnichannel operations, with more personalization on their ecommerce platforms, same-day delivery, and scan-as-you go technology.
In March, Walmart increased their offering with the introduction of meal kits into more than 250 stores, with plans to roll out to 2,000 this year. These meals were developed in their Culinary and Innovation Center, but are made and assembled fresh in-store daily, making busy customers very happy!
It’s not just the top three though. Other retailers in the top twelve are also fighting. Some have acquired delivery service providers to jump on the same-day delivery bandwagon.
Clearly, Amazon is driving this change like never before and what a year it has been. I see this as a positive for consumers. Since their Whole Foods purchase last June, retailers’ omnichannel operational programs have made huge strides with a strong focus on technology.
The Progressive Grocer’s 2018 Annual Report states that over 50% of grocers now have a fully integrated omnichannel operation strategy in place. That’s good news, because also according to Progressive Grocer, 70% of consumers will buy groceries online by the year 2024!
I’m excited about all of the advancements that have happened in just one year. Being an expert in omnichannel communications, we welcome the chance to help any business rise to the top and beat the Joneses!