(This post was originally published on our new Digital CPG blog. Go check it out for more news and notes on the CPG industry.)
The Meijer grocery chain announced recently that it has expanded the test of its new online/store concept called Grocery Express into the Chicago area (coverage here and here). The concept is pretty straightforward-the customer logs onto the Meijer website, picks out the items she needs and schedules a convenient pick up time for the order. Armed with the customer order, Meijer “personal shoppers” grab all the items and package them up for pick up by the customer in a designated parking lot pick up zone. The customer pays an extra $6.95 fee for the privilege of zipping into the parking lot to pick up the goods.
Webvan put a fork in the online CPG industry for several years, but innovation is starting to percolate again in this market. For example, delivery services like Amazon Fresh are expanding, and CPG manufacturers like P&G have been making some noise about eCommerce lately. (Our company is certainly making a run for the mainstream CPG consumer as well).
It makes sense for a traditional retailer like Meijer to leverage its existing store infrastructure to deliver an online/offline hybrid offer. So much sense that I suspect many traditional retailers will jump on this bandwagon if the concept shows promise. But the key question becomes whether this will attract the mainstream consumer. Our research at Alice.com shows that shipping fees have been a huge barrier to online CPG. Will consumers view this $6.95 fee in the same fashion? Another high profile launch of the “order online/pick-up” model, Sears MyGopher, hasn’t faired too well.
Time will tell whether Meijer will be more successful, but we’d love to hear your views. Is the Grocery Express concept a winner for CPG eCommerce?
[...] Will Meijer’s Grocery Express Work? – Alice [...]
surely you jest….have you ever been to chicago?
people that live in chicago know there is a grocery store every few blocks underground.
the metro transit will shut down any operation in record time that contributes to more congestion.
personally i do not like some one else doing my shopping,i pick out the best apples and know how
to read date codes,why would i pay to have someone dump old stock
You bring up an interesting point Allen regarding pre-sale inspection. One of the reasons we really like the Alice.com model without perishables is because this isn’t a concern (that is, unless you want to Squeeze the Charmin).
I would pay 6.95 in a heartbeat! I LOATHE grocery shopping…….. just last weekend I was (jokingly) offering my facebook friends 20 bucks to do my shopping for me. I live in a rural area of Kalamazoo. My Meijer is about 5 miles away from me. If I was concerned about the produce issue, I could get that on my own and it would STILL be worth the 6.95 to have someone ELSE do the bulk of my shopping!!! Winters have been getting pretty wicked here lately, and it would be HE-VAN to not have to go out to get my groceries in the middle of a snowstorm!!
ACK! I hate typo’s……… that would be heA-ven : )
There is only one success – to be able to spend your life in your own way.
If the targeted customer is a value-driven consumer – the $6.95 fee seems wrong for two reasons: 1) if there is low demand for the service, there shouldn’t be any net increase in store costs, so why charge me? I still have to pay for gas to get to the store. 2) if the service is a success (and doesn’t cannibalize existing sales – a net increase), then there should be sufficient margin to pay for someone to fill the basket.
I can’t imagine if I give the store 4 hours lead time, they can’t get a basket filled and packaged with existing labor. I could see a cancellation fee within x hours or maybe a late hours fee – that seems reasonable. But a $6.95 charge as the value of my shopping time is the equivalent of about $10.00 for me (I need to earn $10 to have $7 net). Seems a little high.
Why do these companies create these programs then add fees to ensure no one wants to even try them?
Good information in your blogpost, I watched this report on tv last week about this same thing and since I am getting married next month and the timing couldn’t have been better! thanks for the tip!, I have bookmarked, thanks Dale Sheth
I love this product how am I able to order more?