Grocery stores are racing to provide customers improved services and technology as more take advantage of online shopping.
It’s created a “grocery war” among the largest and smallest stores in an industry that produces $682 billion a year for local economies, according to the Food Market Institute. About 4.8 million people were employed by the industry in 2017.
Kroger, Dot’s Market, Meijer, Dorothy Lane Market, Aldi, Walmart and others already offer online shopping and home delivery in the Dayton region, but industry experts say this won’t be enough if they want to compete with Amazon.
Since Amazon purchased Whole Foods for almost $14 billion in August 2017, there has been a major shake-up in the grocery industry. The online giant has forced grocery stores to better their online products and services in other markets.
Online grocery shopping is expected to reach $100 billion in worth as early as 2022. While 60 percent of shoppers currently prefer to shop in stores, about 70 percent of shoppers will occasionally shop online for their groceries by that year.
Only 2 percent of grocery sales are currently online, but grocery analyst and former digital, supply chain and strategy consultant for Kroger, Brittain Ladd, expects that number to reach 20 percent by 2025.
Both a physical and online presence are important moving into the future of grocery, Ladd said.
“Grocery shopping is very personal for most people,” Ladd said, especially when it comes to products like dairy, meat, fruits and vegetables that customers want to “inspect and select.”
Grocery stores have worked to convince customers that they can pick the freshest and highest quality items through the use of personal shoppers, who will begin to understand exactly what each customer wants the more customers order.
The successful grocery store will be the one that can convince a customer that their pickup or delivery will have the perfect product every time, Ladd said.
“Until that happens, especially on items most personal to the customer, they’ll continue shopping for that on their own,” Ladd said.
Kroger, the largest grocery provider in the Dayton area, has offered its ClickList online ordering service since November 2014, but increased the programs footprint to over 1,000 locations by December 2017. Of the 44 supermarkets in the Dayton area, 12 offer ClickList services, where customers can park their cars outside the stores and have an associate load their grocery orders.
Walmart is also taking steps to make online ordering and in-store pickup even easier. The company has constructed nine 16-foot-tall vending machine style Pickup Towers in Ohio, including in Lebanon, Fairfield Twp., Franklin and Middletown. After ordering on the app, customers can scan a barcode to retrieve groceries from the machine. Walmart has also started offering curbside pickup.
Target hasn’t yet offered pickup for Dayton-area customers, but its service is rapidly growing with availability in 270 stores throughout the South and southeast United States. The company plans to offer the service at nearly 1,000 stores by the end of 2018.
Even smaller retailers like Dorothy Lane Market with locations in Springboro, Washington Square and Oakwood, Ohio, are getting a piece of the action. In February 2017, the company launched DLM Drive-Up, allowing customers to pick up groceries ordered on the company’s website.
With Amazon’s free two-hour Whole Foods delivery for Prime members in many cities including Cincinnati and Columbus, and an intent to increase its market share, traditional brick-and-mortar grocery stores have jumped into delivery. Local grocery stores have partnered with companies like Shipt and Instacart to offer the service.
Whole Foods does offer delivery in Dayton through Instacart, an online same-day delivery company.
Kroger also used Instacart to move into delivery, with the grocery service delivering straight to customers’ front doors from 1,200 of its 2,800 stores. Through its merger with Home Chef, the country’s largest private meal kit company, Kroger now also delivers prepared kits to customers’ homes.
The Cincinnati-based company has shown an innovative vision for the future of grocery with last month’s announcements that it will test self-driving delivery vehicles and open a second headquarters in Cincinnati to hold its digital team.
CharAnn Barbadora of Kettering, Ohio, said she’s never used delivery before, but she would consider it in the near future.
“I don’t have a car, and I’m in a retirement home,” the 84-year-old said.
Barbadora has someone willing to take her to grocery stores, but recognizes the convenience of delivery services.
She’s not worried at all that she won’t be able to inspect the freshness and expiration dates of her fruit, and fully trusts the stores to provide the best product.
The success of Dorothy Lane Market’s Drive-Up program drove the company to offer home deliveries in seven Dayton-area zip codes, with plans to expand the radius if customers take advantage of the program.
Couple Samy, 27, and Josh Warn, 33, of Kettering have not used delivery services yet but have considered it in the past. They said within the next several years they will begin using the service as their preferred grocery shopping method.
“It’s just the convenience I think,” Samy said. “The ease and knowing that everything could be delivered would be nice.”