FMI Connect: 2 Views of e-Commerce
The folks at Shipt’s booth (#837) at FMI Connect, which took place June 21-23 at Chicago’s McCormick Place), were all abuzz with the grocery delivery service’s latest news: It was launching in its 26th market, Houston; about to enter another Texas city, Austin; and to expand in Dallas, all through its ongoing partnership with San Antonio-based H-E-B. With those gains in the Lone Star State under its belt, the company appeared to be a good part of the way toward its ultimate goal of going national.
Asked what distinguished Shipt from the rest of the grocery delivery pack, Anne Adams, community manager at the Birmingham, Ala.-based company, cited its membership platform, which costs members less than $9 a month as long as their grocery order is under $35, with no surge pricing, and its large coverage area, which usually includes a market’s suburbs and outlying areas.
Ahead of a market launch, Shipt will normally hire about 300 independently contracted shoppers – rigorously screened and trained by the company – and then build on that number depending on the needs of the area, explained Adams. The job enables people to choose their own schedules, she added, with ratings from customers maintaining quality service.
Indeed, Shipt is highly tuned into its users via social media: It’s live on Facebook 24/7 to respond to any issues. In fact, as Adams and Digital Marketing Manager Micah Whitehead attested, the “relationship-based” company has even leveraged customer feedback to make business decisions. Shipt started out doing deliveries for retailers such as Home Depot, but branched out into grocery based on recommendations from members. Similarly, once the grocery business was established and had rolled out to Tampa, Fla., customer requests for it to expand to Sarasota were granted, Adams and Whitehead recounted. “Our business is built on social media,” noted Whitehead, while Adams asserted, “Customer service is our top priority.”
Further, in keeping with its brief of community engagement, Shipt teams with various nonprofit organizations, particularly – and fittingly – in the area of hunger relief.
Own the Experience
By comparison, Winooski, Vt.-based MyWebGrocer (Booth #1020 at FMI Connect) is an old hand at e-commerce – the company has been around for 17 years and works with 130 food retailers. Barry Clogan, MyWebGrocer’s recently named SVP business consulting services and a veteran of U.K. grocer Tesco, which runs a robust online grocery business, noted that although the United States is behind Britain in this space, he sees plenty of potential for growth. The key challenge? “It’s bloody hard to make money,” Clogan candidly admits.
MyWebGrocer offers its retail customers both the front end user experience and the back end capability – the latter of which, Clogan conceded, isn’t “sexy” – to create their own online grocery platforms, observing that its long time in the business gives it greater scale in leveraging loyalty data and productively picking orders. According to Clogan, this helps the company’s retail customers stand apart from companies that sign up with other grocery delivery providers. “Grocers want to maintain and own that relationship with the customer,” he explained. “They want to own that experience, that journey, so that they can build loyalty and incremental value with the consumer.”
One of those grocers is Pittsburgh-based Giant Eagle, which recently signed with MyWebGrocer and “plans to roll out online grocery aggressively,” said Clogan, who acknowledged that partnerships with other food retailers were currently in the works.
He observed that with all of the new competitors to traditional grocery arriving on the scene – what Brick Meets Click dubbed “basket bandits” in a study sponsored by MyWebGrocer – including meal prep delivery services like Blue Apron and online powerhouses such as Amazon, the latter of which, he pointed out, was currently attracting an impressive 48 percent of online grocery trips, virtually all grocers will develop an online grocery business in response. Referring to this period of growing competition as “a fundamental tipping point” for conventional grocers, Clogan asserted, “The only way to win is to be involved.”