In the Netherlands, for example, Picnic provides customers with fixed delivery slots, backed by their milkman model and demonstrated to be able to reach up to 14 deliveries per hour. Kroger has retrofitted just about every shelf in two stores in Monroe, Ohio, and Redmond, Wash., with Microsoft’s smart shelves. We strive to provide individuals with disabilities equal access to our website. Some are expanding into adjacencies, such as household products or health and wellness items, that provide more opportunity for growth and customer delight. Grocers have remained largely immune to digital disruption—until recently. Amid Grocery Retail Disruption, H-E-B Grows Digital Services by JJ Velasquez July 16, 2018 January 31, 2020. Use features like bookmarks, note taking and highlighting while reading DIGITAL DISRUPTION in CPG & Retail. 8. 92 0 obj <> endobj Some miss the sensory experience of shopping in person and feel that they miss out on discovering new ingredients, different meal ideas, and good values. Grocers have remained largely immune to digital disruption—until recently. Kroger Disrupts the Disruptors By Jackson Lewis on Jan. 08, 2019 CINCINNATI -- Kroger and Microsoft are teaming up and taking on Amazon. Please try again later. 4. The BreadBot may shake up the industry – and bring fresh bread into grocery stores – with the help of automation. The digital grocery platforms (eGrocery) have been disrupting the enormous grocery opportunity in India over the past 5-6 years. Institute of Grocery Distribution says online grocery sales in 2018 were approximately $23.9 billion. Understanding them could help grocers of all sizes chart a course to profitable growth in the new, much more competitive environment. endstream endobj 93 0 obj <>>> endobj 94 0 obj <. Kroger has expanded its pickup locations for online orders to 1,900 locations and offers delivery of online-ordered groceries from 2,300 locations. Reinvent your business. We'll email you when new articles are published on this topic. Some grocers are learning from other retail sectors and countries, recognizing threats early, seizing opportunities, and catching a wave of profitable growth. Large tech companies and hot start-ups continue to have the first pick of data scientists, tech engineers, robotics and artificial-intelligence experts, scrum masters, full-stack architects, and a host of other technical specialists. People create and sustain change. 6. our use of cookies, and 1 The speed of technology adoption has been startling some of the world’s most successful companies since the 1990s—and it is accelerating faster than ever. Select topics and stay current with our latest insights, By Steven Begley, Eric Marohn, Sabah Mikha, and. Instacart, which launched in 2012, has expanded rapidly and can reach more than 80 percent of US households. Making matters more challenging, customer demand is fragmented between delivery and pickup, and various delivery speeds each require a different last-mile model. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. Kroger press release, December 2019. Never miss an insight. We believe that is a major issue, since digital talent may be the single most important determinant of a company’s likelihood to succeed in the grocery market in the next few years. Nearly every major industry, from insurance to mining, is struggling to recruit and retain digital talent, given that demand currently outpaces supply. 7. ShopperScape® Online Grocery Survey, 2019, Kantar, kantarretailiq.com. Grocers have remained largely immune to digital disruption—until recently. Not surprisingly, most first-time online customers expect to get their groceries more seamlessly than when going to the store themselves. Use minimal essential We are also starting to see significant innovations in the omnichannel grocery-customer experience in several Asian markets (such as China and Japan). Analysis derived using inputs from multiple public sources, including Food Marketing Institute, Forrester, and Nielsen. They are also finding that integrating e-commerce fulfillment and retail-store operations can improve employee utilization, since staff can fulfill electronic orders when in-store customer traffic is low. Grocery stores need to understand and successfully implement these trends to win in e-grocery and be profitable in 2020. Indeed, the offerings themselves are now shaping customer expectations about each element of the experience, including the type and speed of service—which will evolve as quickly as the offers do. Target and Walmart now offer e-commerce fulfillment at store locations and last-mile delivery through the acquisition of Shipt and a partnership with Postmates, respectively. The grocery market is supply driven, and consumers don’t yet know what they want. Where demand density is low and demand is fragmented, investments in large fulfillment centers, delivery fleets, and drivers are hard to justify. However, they tend to have more strategic agility, cultures of innovation, and white space. 1. Digital Disruption has influenced also the grocery retail industry and according to Chris Morley, U.S. President FMCG and Retail, Nielsen, “the grocery industry is cur-rently in the age of digital experimentation, where the roadmap on how to navigate and achieve real and profitable growth continues to evolve” (Nielsen 2018). Here are a few suggestions for leaders striving to win in e-grocery: Steven Begley is a partner in McKinsey’s New Jersey office, Eric Marohn is a consultant in the Chicago office, Sabah Mikha is a consultant in the Southern California office, and Aaron Rettaliata is a partner in the Pittsburgh office. More than ever, retail companies need agile, compelling digital presences. “The social economy: Unlocking value and productivity through social technologies,” McKinsey Global Institute, July 2012. Companies should ensure their digital presences bolster their brands and engage millennials. Please use UP and DOWN arrow keys to review autocomplete results. Almost all are looking for new ways to partner with consumer-packaged-goods companies to engage more deeply with customers. Digital upends old models. Which mean it should come as no surprise that Mr. Seinfeld, in his side job as a real-life stand-up comedian forecasted the disruption of the grocery shopping experience in a … tab. The grocer is testing digital shelving powered by Microsoft tech. Download it once and read it on your Kindle device, PC, phones or tablets. Search inventory or check stock at your Brea Store in Brea, CA. If you would like information about this content we will be happy to work with you. 5 Many formidable players are now competing for e-grocery dominance. 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