Progressive Grocer

FEB 2017

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48 | Progressive Grocer | Ahead of What's Next | February 2017 Profiles in Progress Ecommerce ecommerce in the previous fiscal year, e Wall Street Journal reported in November 2015. Among the mega-retailer's initiatives in the grocery ecommerce space were partnerships forged last June with rideshare services Uber, for the Phoenix market, and Lyft, for the Denver market. Particularly interesting is the Uber partnership, notes Jim Wisner, president of Libertyville, Ill.- based retail consultancy Wisner Marketing Group. While most other services require scheduling time windows for delivery, Uber empowers the retailer's shoppers to get their deliveries whenever they want. Turning from delivery to click-and-collect, Walmart has continued to expand its pickup program in various markets in the past year. In April 2016, for instance, the company brought free curbside pickup of groceries to eight new cities, including Kansas City, Mo.; Boise, Idaho; Charles- ton, S.C.; and Austin, Texas. As Walmart ramps up competition against Seattle-based Amazon.com, attention to perish- ables will play a critical role, especially since the ecommerce behemoth hasn't yet developed the same reputation in the area of groceries, particu- larly perishables, that it has in nonconsumables, notes Carol Spieckerman, president of Spiecker- man Retail, a consultancy based in Bentonville. In response, the company is putting in place what Wisner calls an "extensive training program" for team members who prepare shoppers' orders, with special attention paid to perishables. But these initiatives don't hold a candle to what's arguably Walmart's biggest ecom- merce move yet: the acquisition of Ama- zon's most capable ecommerce competitor, Jet.com. e $3 billion cash deal included not only the Hoboken, N.J.-based com- pany's proprietary technology, customer data and ecommerce expertise, but also the services of its co-founder and CEO, Marc Lore, who will head Walmart's online divi- sion for several years. "e combination of Walmart's retail expertise, purchasing scale, sourcing capabilities, distribution footprint and digital assets, together with the team, technology and business we have built here at Jet, will allow us to deliver more value to the customer," Lore, a former Amazon executive, said at the time of the acquisition last August. Of particular benefit for grocery shop- pers: Jet's pricing platform calculates dis- counts as shoppers purchase more, which helps drive volume and average order value. is is critical in the low-margin ecommerce grocery busi- ness, Mike Elmgreen, CMO of New York-based B2B ecommerce platform provider Handshake, told Progressive Grocer at the time of the acquisi- tion announcement. Additionally, since Jet was a late ecommerce entrant, it used quick delivery as a differentiator, positioning warehouses and stream- lining logistics to maximize rapid delivery — some- thing especially critical with perishables. Jet's technology is state-of-the-art enough to match Amazon's, says Bill Bishop, chief architect with Barrington, Ill.-based retail technology firm Brick Meets Click. And combined with its market position, which allows it to outflank Amazon on price, the acquisition could well be a game changer for the industry. Kroger Kroger is well known for being careful and disci- plined across its business, from leveraging consumer insights for product development to integration of entire regional chains into its overall operations. It approaches ecommerce in a similar manner. e Cincinnati-based grocery giant is methodi- cally growing its way to online success by expanding its click-and-collect service to a growing number of markets. Formally dubbed ClickList in fall 2015, the service came into existence following the company's 2014 merger with regional grocer Harris Teeter, which learn as you G row Kroger gained a firm footing in the world of online vitamin and health product retailing through its 2014 acquisition of Vitacost.com. The combination of w almart's retail expertise, purchasing scale, sourcing capabilities, distribution footprint and digital assets, together with the team, technology and business we have built here at Jet, will allow us to deliver more value to the customer." —Marc l ore, Jet.com

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