Curbside Convenience

Learn how to profit from the consumer appeal of click and collect

June 20, 2016, 06:05 pm

Brick-and-mortar retailers dominate the grocery sector by far, but the buy online/pick up at store process known as “click and collect” is gaining popularity, changing the face of traditional shopping by offering a convenient alternative to walking up and down the supermarket aisles.

“Advance ordering online can allow shoppers to swoop in, pick up their purchase and pay—and if shoppers can pay in advance or at least avoid having to go through the regular checkout line, it’s also a big plus,” according to the International Dairy-Deli-Bakery Association’s (IDDBA) “Digital Merchandising for Deli and Bakery” report, prepared by Brick Meets Click in 2015.

A report released in 2016 by the Grocery Manufacturers Association (GMA) and the Boston Consulting Group also pointed to click and collect as a logical next step in grocers’ efforts to boost business and compete with such nontraditional players as Walmart and Target, not to mention giant e-tailer Amazon.com.

“The Winner-Take-All Digital World for CPG” report observed that customers representing young families and affluent couples are especially willing to try online grocery shopping. “And when they do make purchases online, they are likely to spend far more across all channels than they would have done by shopping in the traditional way: the uplift often ranges from 30% to 50%,” according to the GMA report.

The GMA report also suggested that a considerable rise in online penetration occurs in any market where two or three grocers engage in an online fight for customers because the competing companies invest in growing and marketing their offers.

For the deli and prepared food departments in particular, the click-and-collect model represents an evolving opportunity that makes a lot of sense.

“Immediate consumption and eating on the go are both growing behaviors, and supermarket deli and bakery are well-positioned to serve these shopper occasions … For the time-starved at lunch hour or the working mom on her way home, being able to bypass the need to speak with a clerk and wait for the order to be prepared can be the deciding factor in where to shop,” concluded IDDBA’s “Digital Merchandising for Deli and Bakery” report.

Major supermarket chains such as Kroger and Whole Foods have been building out click-and-collect services, with plans to continue growth in this area.

Cincinnati-based Kroger Co.’s ClickList online grocery ordering and in-store pickup system, which includes a $4.95 fee for regular orders and $7.99 for expedited ones, is being rolled out in markets across the United States.

Kroger’s program is designed to let customers order and purchase items from a selection of about 40,000 grocery products online and then pick them up at a store at a designated time. Store staff places orders directly in customers’ cars. ClickList was born following Kroger’s 2014 merger with Harris Teeter, which gave the retailer access to the Matthews, N.C.-based Express Lane technology as a jumping-off point.

In his annual letter to shareholders highlighting Kroger’s long-term focus and strategies, chairman and chief executive officer Rodney McMullen stressed that ClickList builds on the retailer’s commitment to improving customers’ lives with an added level of convenience.

“As of the end of the first quarter 2016, ClickList and Harris Teeter’s Express Lane service are operating in 221 stores. Customer feedback has been remarkable—they love it and tell us pickup is just as convenient, if not more convenient, than home delivery,” McMullen wrote. “We will continue expanding the availability of ClickList in more stores and more markets. Longer term, we are working toward providing our customers with a truly seamless shopping experience, where they can count on us for anything, anytime, anywhere.”

Austin, Texas-based Whole Foods Market and grocery delivery service Instacart, meanwhile, recently announced they will continue their partnership, expanding the number of Whole Foods stores with dedicated Instacart shoppers by up to 50 percent nationwide by the end of 2016.

Whole Foods partnered with Instacart in 2014 to offer its grocery home delivery service and in-store pickups. By ordering at Instacart.com or via the Instacart mobile app, Whole Foods customers can add items to a virtual cart, choose a delivery window (within one hour, within two hours or at a scheduled time), check out and receive their orders at their doorsteps from Instacart personal shoppers.

“We’ve seen how much our customers love this fast and convenient way to receive Whole Foods Market groceries right to their door, so we are excited to extend our relationship with Instacart,” said Walter Robb, co-CEO of Whole Foods Market. “Working together, we will continue to find even more ways to create outstanding shopping experiences—whether they’re happening in the digital space or within the four walls of our stores.”