Many supermarket operators are rapidly expanding their Buy Online Pickup In-Store programs as a pathway into the digital world.
ShopRite, Publix, Wegmans, Aldi and others are currently in the process of making major investments to achieve and expand this function. Many use third-party service providers like Instacart, which supplies online access and delivery.
Vitally important as these developments are, it’s not everything. In a sense, BOPIS can be viewed as an add-on to store operations and subject to their procedures and, especially, that culture. Online powerhouses like Amazon, Alibaba and JD have been digital since inception and function much differently. Their stores ‑ Amazon Go, Alibaba’s HeMa and JD’s 7Fresh ‑ feature complete integration of on-site shopping and digital selling that has been built into the concepts from the design stage. They are much closer to a seamless experience.
Some U.S. grocers are starting to move in this direction, too. For example, an important step towards the future is Kroger’s partnership with Ocado, the UK online supermarket.
Ocado’s strictly online operations – it has no stores feature home delivery to a customer base nearing 700-Thousand households. At their heart is the Ocado Smart Platform, which is a complete modular, automated and scalable online retail, fulfillment and delivery solution. This end-to-end solution is designed to power all aspects of an online retail operation and it is the core of what Ocado brings to Kroger.
Ocado has three customer fulfillment centers, the newest being three stories high and 900 feet long. They are highly automated and deploy 1,100 robots and AI. The Ocado system can make four million routing calculations per second. This is the model for Kroger’s planned infrastructure.
Kroger will be the exclusive U.S. user of the Ocado Smart Platform. Up to 20 Customer Fulfillment Centers will be considered, and the partnership is a major step for Kroger in creating a major online business firmly based on technology and not a program that’s an add-on to existing stores.
Most recently, Kroger also announced its testing pick-up locations within Walgreens drug stores. The pilot program will take place over the next several months in 13 Walgreens stores located in Northern Kentucky.
Walmart, too, is making many moves to get deeper into digital. One of them is the launch, in China, of a small high-tech supermarket. It’s stocked with 8,000 items, most of which are available on one of the platforms of JD, the leading online company in China. Shoppers pay for their purchases with their smart phones using a program on Tencent’s WeChat messaging. Delivery can be achieved in 29 minutes within a mile or so of the store.
Kroger and Walmart are taking steps to create a digital business that is not simply an extension of their traditional store operations, but are designed and constructed free from the constraints of those operations and their culture. This is the only way a traditional store retailer will be able to achieve a competitive online business.
For PLMA Live!, I’m Roy White.