Major grocery players, including traditional competitors (such as Kroger and Walmart), e-commerce giants (such as Amazon), and start-ups with venture-capital funding, are making the kinds of major investments and acquisitions—in customer-value proposition, customer experience, picking, and delivery—that herald an era of true transformation. 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. Martin Joerss, Florian Neuhaus, and Jürgen Schröder, “How customer demands are reshaping last-mile delivery,” October 2016. 8. %%EOF h�bbd``b`^$'�X�@�m���mL�A�? Martin Joerss, Florian Neuhaus, and Jürgen Schröder, “. endstream endobj startxref The authors wish to thank Katie Ragan for her contributions to this article. Other changes also seem to be taking hold: While convenience attracts most first-time customers to online ordering, it may not keep them coming back. It used branding along with … Enjoy a full service experience from our bakery, deli, produce and meat departments. November 10, 2018 / By Cami Zimmer. Get Brea Store store hours and driving directions, buy online, and pick up in-store at 2595 E Imperial Hwy, Brea, CA 92821 or call 714-529-0596 The grocery industry is ripe for disruption. The relatively low e-grocery penetration of the United States (around 3 to 4 percent versus around 7 percent in the United Kingdom), coupled with lower population density, creates a significant challenge for grocers and rewards those that have scale. Please use UP and DOWN arrow keys to review autocomplete results. 7. It remains to be seen exactly how these factors will impact the post-pandemic grocery consumer, but what’s certain is that COVID-19 has dramatically accelerated the digital disruption of … 3. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. 129 0 obj <>stream Until relatively recently, shoppers’ grocery options were limited to what was available at their most convenient brick-and-mortar store. Some are expanding into adjacencies, such as household products or health and wellness items, that provide more opportunity for growth and customer delight. Powerful trends, including new competitive pressures, technological advances, and evolving consumer attitudes and behaviors, will disrupt the grocery business from coast to coast in the next few years. Powerful trends, including new competitive pressures, technological advances, and evolving consumer attitudes and behaviors, will disrupt the grocery business from coast to coast in the next few years. Kroger has retrofitted just about every shelf in two stores in Monroe, Ohio, and Redmond, Wash., with Microsoft’s smart shelves. Others may grow frustrated with the glitches that come with new convenience offerings: out-of-stock issues, incorrect or missing items, and general lackluster service. We are also starting to see significant innovations in the omnichannel grocery-customer experience in several Asian markets (such as China and Japan). We strive to provide individuals with disabilities equal access to our website. 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. Understanding them could help grocers of all sizes chart a course to profitable growth in the new, much more competitive environment. Recently, Walmart announced free one-day delivery. While delivery platforms like Instacart scramble to hire new workers, grocery chains are hastily revamping digital and physical operations to adjust to … �>��Zb��A�nq$�$���7+��$xn ��@B|��]$rN3012��� �3-� 5. It remains to be seen which experience US consumers value the most, but it is certain that they will reward consistency. Grocers have remained largely immune to digital disruption—until recently. Some grocers may join forces with noncompeting retailers (such as hard- and soft-goods players) to create, inorganically, delivery ecosystems that rival Amazon. Kroger has also forged a partnership with Cimcorp to bring an automated storage-and-picking system to its dairy facilities. Unleash their potential. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. 7 That said, they are evolving rapidly, driven by start-ups and old-school players, such as auto manufacturers—autonomous Ford vehicles are already delivering Domino’s pizza in Miami, for example. 2 �`� D���i1 V 0�32|b�p`sP`z�����q�t�=�\ We have seen that online grocery is supply driven, and as online grocers provide more supply, customers will adopt the new method of grocery shopping. Today, tens of millions of Americans can shop for groceries online, where their options include curbside pickup and home delivery. Grocers have remained largely immune to digital disruption—until recently. Digital upends old models. There have been many waves of disruption in the grocery market, and the A&P was the first to innovate on a grand scale. But, Grocery has long been a low margin/high volume business, and a hugely labor-intensive business, so as others have pointed out a digital pricing mechanism could be huge, particularly in a small footprint store where perhaps carried items rotate more frequently. Select topics and stay current with our latest insights, By Steven Begley, Eric Marohn, Sabah Mikha, and. Digital Disruption at the Grocery Store McKinsey & Company outlines five trends shaping the grocery industry in 2020. Consumer expectations are higher than they were even a year ago, but they are still being set. Like grocers, shoppers can’t predict exactly what the future will bring. Please try again later. 8 We believe the winners in e-grocery will be those that deliver a great and consistent customer experience the fastest. Some larger and more traditional grocers may resist transformative innovation in the shopping experience as they maintain their focus on the preferences and demands of their current core customer base. Whether you’re in the market for farm fresh local produce, freshly baked cookies or the perfect cut of meat; we have you covered. 6. h�b```�����B cc`a�X�����[�p10��C�a����)AIOmO�;�6�;V����g>lIe ����b�Ғ������;y�÷'@��o�:���8��(9y����"�F_#�c������y�@���b*.. 9��� Instacart, which launched in 2012, has expanded rapidly and can reach more than 80 percent of US households. %PDF-1.7 %���� But many can’t imagine all the options digital grocers might offer. Most transformations fail. Analysis derived using inputs from multiple public sources, including Food Marketing Institute, Forrester, and Nielsen. If you would like information about this content we will be happy to work with you. But to compete with the recruiting capabilities of large technology companies, grocers should take several additional steps: Online grocery on its own is not new news to retailers and the broader consumer community, but the current pace of investment and innovation is unprecedented. hereLearn more about cookies, Opens in new ShopperScape® Online Grocery Survey, 2019, Kantar, kantarretailiq.com. ... “It has even reduced some of the timing constraints of my trips to the grocery store. Almost all are looking for new ways to partner with consumer-packaged-goods companies to engage more deeply with customers. Amid Grocery Retail Disruption, H-E-B Grows Digital Services by JJ Velasquez July 16, 2018 January 31, 2020. 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