Retail Leader - May/June 2018 - 16

> SUPPLY CHAIN

Skipping the Trip
AGGRESSIVE PROMOTION OF HOME DELIVERY WILL IMPACT STORE TRAFFIC, BUT
THE ALTERNATIVE IS LOSING SHARE TO COMPETITORS MOVING FAST TO OFFER
AN INCREASINGLY IN-DEMAND SERVICE. > By Mike Troy

N

Never have so many retailers been so eager to incur huge
technology costs and upend operations to provide a service
that encourages shoppers to avoid coming to stores. Yet,
that is what is happening across the nation as retailer after
retailer touts the availability of home delivery services
alongside click and collect, which for many conventional
retailers served as their gateway to the digital age.
The shift is noteworthy because store traffic, alongside
transaction size, has long been a metric retailers measured
and touted as an indicator of success. However, 2018 likely
will be remembered as the year store traffic became a much
less reliable indicator of success due to customers' evolving
expectations of retailers' service offering. That's because
as satisfaction grows with alternative fulfillment methods
such as click and collect and home delivery the universe of
physical-first shoppers from whom trips are available to be
captured will inevitably
decline. Market share and
transaction size will matter more even as stores
retain their central role
in how most retailers are
satisfying shoppers who
opt to engage digitally.
"Stores are an incredible asset for us," said

Udelv CEO Daniel Laury's
autonomous delivery vehicle has
made more than 100 deliveries
from Draeger's stores in the San
Francisco area.

16

Retail Leader.com MAY/JUNE 2018

Matt Thompson, Kroger's Vice President of Digital Business,
echoing a familiar sentiment of many retailers. The importance
of stores to Kroger's digital offering occurred in 2014 with the
acquisition of Harris Teeter and its 150 store ClickList operation. Since then, Kroger has embraced click and collect and
increasingly home delivery. Kroger added 40 ClickList locations
in 2016, another 450 in 2017 and will add 500 more this year,
according to Thompson.
"We've never seen a category with such rapid adoption," he
said recently at the Home Delivery World retail supply chain
event. Kroger also relies on roughly 1,200 of its physical stores
to fulfill home delivery orders in nearly 50 markets. "By the
end of the year we will have full delivery in all of our major
markets," Thompson said.
Other retailers are moving fast to offer and expand digital
methods of engagement, which are universally reported to be
popular, although no publicly held grocer has yet provided
meaningful customer usage metrics to substantiate such claims.
"Everything we do now is next day delivery, but we are
looking to do same day quickly," said Valery Ciarimbola, Senior
Director of E-Commerce Operations with Giant Eagle, the
Pittsburgh-based operator of more than 200 supermarkets.
"The first three deliveries are free and then $4.95 after that. The
magic number of delivery orders to keep (customers) sticky
with us is five or six."
Giant Eagle fulfills home deliveries out of 36 stores currently,
has more than 50 click and collect locations branded
as Curbside Express and expects to add another 20 this
year, according to Ciarimbola. Applied Predictive Technologies helped Giant Eagle build a predictive model
that allowed for the prioritization of locations.
At SpartanNash, the Grand Rapids, Mich.-based food
company whose retail division operates 145 stores, click
and collect and delivery are expanding rapidly. Matt
Van Gilder, Manager of E-Commerce Operations with
SpartanNash, said a click and collect service branded as
Fast Lane launched last July and is now available at more
than 50 stores. Orders for home delivery are fulfilled
from six stores.
"We are very happy with the growth we see week over
week," Van Gilder said, noting that the service is helping
capture new customers and 50 percent of sales are incremental. The incrementality is key because SpartanNash


http://www.retailLeader.com

Table of Contents for the Digital Edition of Retail Leader - May/June 2018

Contents
Retail Leader - May/June 2018 - Cover1
Retail Leader - May/June 2018 - Cover2
Retail Leader - May/June 2018 - 3
Retail Leader - May/June 2018 - Contents
Retail Leader - May/June 2018 - 5
Retail Leader - May/June 2018 - 6
Retail Leader - May/June 2018 - 7
Retail Leader - May/June 2018 - 8
Retail Leader - May/June 2018 - 9
Retail Leader - May/June 2018 - 10
Retail Leader - May/June 2018 - 11
Retail Leader - May/June 2018 - 12
Retail Leader - May/June 2018 - 13
Retail Leader - May/June 2018 - 14
Retail Leader - May/June 2018 - 15
Retail Leader - May/June 2018 - 16
Retail Leader - May/June 2018 - 17
Retail Leader - May/June 2018 - 18
Retail Leader - May/June 2018 - S1
Retail Leader - May/June 2018 - S2
Retail Leader - May/June 2018 - S3
Retail Leader - May/June 2018 - S4
Retail Leader - May/June 2018 - S5
Retail Leader - May/June 2018 - S6
Retail Leader - May/June 2018 - S7
Retail Leader - May/June 2018 - S8
Retail Leader - May/June 2018 - 19
Retail Leader - May/June 2018 - 20
Retail Leader - May/June 2018 - 21
Retail Leader - May/June 2018 - 22
Retail Leader - May/June 2018 - 23
Retail Leader - May/June 2018 - 24
Retail Leader - May/June 2018 - 25
Retail Leader - May/June 2018 - 26
Retail Leader - May/June 2018 - 27
Retail Leader - May/June 2018 - 28
Retail Leader - May/June 2018 - 29
Retail Leader - May/June 2018 - 30
Retail Leader - May/June 2018 - 31
Retail Leader - May/June 2018 - 32
Retail Leader - May/June 2018 - 33
Retail Leader - May/June 2018 - 34
Retail Leader - May/June 2018 - 35
Retail Leader - May/June 2018 - 36
Retail Leader - May/June 2018 - 37
Retail Leader - May/June 2018 - 38
Retail Leader - May/June 2018 - 39
Retail Leader - May/June 2018 - 40
Retail Leader - May/June 2018 - 41
Retail Leader - May/June 2018 - 42
Retail Leader - May/June 2018 - Cover3
Retail Leader - May/June 2018 - Cover4
http://www.nxtbookMEDIA.com