Michael Schutt, who is in his first year as director of produce and floral for West Sacramento, Calif.-based Raley’s, discussed at the West Coast Produce Expo his company’s growing online business and his experience with navigating the pandemic as he has transitioned into a new role.
Raley’s opened four stores this year, including a dark store to help with fulfillment of online grocery orders. While the pandemic significantly accelerated the interest in online grocery across the country, Raley’s already had been expecting growth in that area.
“E-commerce is going to be a key component to our future business,” Schutt said. “When you look at the growth of millennials and Gen Z consumers, as brick-and-mortars, we just feel that we have the upper hand on how to deliver on that experience over maybe a warehouse that’s picking (items). The key is really for us to build a rapport with the customer and make it more personalized than just clicking a button on a computer.
“We have the talent to be able to do that because we engage with customers every day,” Schutt said. “That allows us to pivot with substitutions, and I think those are the places where you can really lean in if you’re a grocer.”
For example, if loyalty data shows that a certain customer always buys a certain type of tomato when they are on sale, and they aren’t in the basket for her online order, the personal shopper can reach out to the customer and ask if she would like to add those to the order, Schutt said. Interactions that show customers there is a person on the other side of that transaction taking care to give them a great experience is key to winning that business.
Schutt told a story about a customer who received in her online order a free container of juice with a hand-written note that the personal shopper had left, explaining that the juice was being added at no charge because the personal shopper thought that, based on what else was in the cart, the customer might like the item.
“She will now not shop anywhere else,” Schutt said. “That is how you create a connection and personalize the experience and let the customer know that you’re paying attention, that this isn’t just a process of selecting an order but you’re shopping for someone.”
The dark store, while the term sounds mysterious, is a way to give traditional stores some relief from the e-commerce business.
“It just behaves as an e-commerce hub to really provide relief to a grouping of stores,” Schutt said. “It should be able to not just relieve those stores from the fulfillment but also should expedite the orders for the customers, and then also gives an outlet for even the other entities like the Instacarts of the world to come in and do their orders there as well and get through with the ease of checkout and not disrupt our regular customer flow in the brick-and-mortar outlet.”
Raley’s isn’t seeing the kind of e-commerce business it did in March, but the new baseline is about double what it was last February, Schutt said.