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5 Ways Grocery Can Compete with the Amazon/Whole Foods Market Merger

June 16, 2017 by Jim Bengier, Chief Customer Officer

Amazon Whole Foods Market Merger Delivery

Competition in the Grocery eCommerce and fulfillment market will increase as grocers scramble to provide customers with more convenient ordering, pickup and delivery options.

G

rocery look out! Whole Foods Market will add over 430 stores to Amazon’s already superior fulfillment network. It will also provide Amazon with access to more grocery purchase history data than ever before. And you know they’ll use it well. So, what’s in it for Whole Foods?

A reduction in supply chain and distribution costs will let them drop prices (and maybe steal back some organic food market share from Kroger). And if they leverage even a fraction of Amazon’s eCommerce knowledge and experience, they will no doubt dominate the online grocery segment. But given Amazon’s commitment to continuous innovation, it won’t stop there.

Combine this with:

  • Amazon Dash button replenishment orders
  • Subscribe and Save discounts
  • Voice orders via Alexa, and
  • Private label products like the Amazon Elements line of supplements

The grocery industry is about to get a shakeup. So, what can you do to compete?

1. Buy Online, Pickup In-Store

Offer Buy Online, Pickup In-Store, sometimes called Click and Collect. Your customers receive all the benefits of same-day or next-day groceries without a delivery charge. Whole Foods Market may have 430 stores, but for now, many of you still have the local advantage. Use it to build loyalty while you can.

And if you really want to win them over, offer curbside pickup. Ideally a covered drive-through to protect customers and employees from the weather. Combine this with delightful customer service at pickup and your customers with young children or physical disabilities will rave about you.

2. Real-Time Substitutions

Your store associate is picking an order for pickup. An item is out of stock. Can they contact that customer immediately? Via text or phone? If so, they could offer (and get approval for) a substitute product in real-time. You save a sale, the customer is happy, and there is little extra work required by the store associate.

3. Dynamic Scheduling and Delivery Pricing Model

Grocery delivery can be expensive. But a dynamic model can help manage that cost. How? You can incentivize customers to select a non-peak delivery window by offering a lower delivery cost. This helps you manage the impact on your stores, and leverage off-hours labor for delivery orders.

4. Subscription based orders

With subscription orders, a single purchase decision equals many transactions. You only need to convince or entice the buyer once. And it doesn’t just benefit your top line, it can also provide customer insight that can be used to improve inventory forecasts.

5. Integrate your offline and online loyalty programs

Your customer data is a huge competitive advantage. Use it well. If you integrate your loyalty card data with your ecommerce platform, you can provide better online product recommendations and promotions.

In short, the time for change is now. Can you afford to be left behind? If you need help crafting your grocery fulfillment strategy, contact us today.

Filed under: Omni-Channel, Retail