Delivery or pick-up? That’s the debate for retailers as we explore the future of online grocery.
Wal-Mart Stores Inc. saw e-commerce grow 60% in the second quarter of fiscal 2018, and the Bentonville, Ark.-based company attributed much of that growth to grocery pick up.
But, is pick up enough?
Erick Taylor, president and CEO of Pyramid Foods, Rogersville, Mo., doesn’t think so. During a Q&A session with editorial director Greg Johnson at The Packer’s Midwest Produce Expo in Kansas City in August, Taylor said he sees 30% to 40% of grocery sales moving to e-commerce, with the bulk of that in delivery, not pick up.
Retailers would love to see that growth in pick up, if only to avoid the logistics hassle, he said. They’re turning to a myriad of solutions for delivery while they figure out how to do it in-house. For some, it’s third-party services like Instacart, Shipt or Amazon Prime Now. Aldi and Wegmans are the latest to join up with Instacart, and Sprouts says it’s expanding Amazon Prime Now to new markets.
The most extreme version I’ve seen is Wal-Mart’s tests using employees to drop off online orders on their way home from work.
As a consumer, I choose pick up, but that might be influenced by the 105-degree temperatures at my Austin, Texas, home much of the summer. I’d rather a retailer keep my order in a cooler until I can get it than risk it sitting on my doorstep or in a delivery vehicle.
I’ve seen what a trip home does to the ice cream in my own car. I’m not confident in the cold chain integrity of a Wal-Mart employee’s back seat, either.
Bottom line? E-commerce is a must, no matter where you are. Wal-Mart says it has stores within 10 miles of 90% of the U.S. population.
That’s a lot of potential pick-up locations, and they’ve proven they can scale up quickly.