Delivering the goods on grocery delivery
In a move that will help it compete with Amazon, Walmart is launching one-day delivery in parts of the U.S., with plans to expand the service to 75% of the country later this year. Most retailers across North America are doubling their e-commerce strategies to meet consumer demand for greater convenience, and Canadian grocers are no different.
Sobeys is investing $100 million on a distribution centre just north of Toronto to fulfill orders for its “Voilà” online grocery service launching next year. In addition to its home delivery service through Instacart, Loblaw’s is expanding its click-and-collect service. Some movement has been reported at Metro, and Costco is piloting delivery in southern Ontario.
Canada’s online shopping in food retail represents roughly 1.8% of the $120 billion market–a drop in the bucket, really. But some analysts suggest Canada could catch up to the U.S. by 2025, where 7% of all food sold at retail is purchased online. It may not look like much, but 7% would be almost $9 billion worth of food. With laser-thin margins, generating more online revenues will be key. Grocers have realized for a while now that embedded into a successful delivery model is the illusion of a free service to consumers. Selling food online and increasing profits while the customers remain convinced they’re getting deals is a feat that can only be achieved through algorithms and analytics, an art Amazon has mastered for decades.
As the industry attempts to make its offerings more convenient, there’s one important thing to keep in mind: convenience will always trump the environment and our health. Most often, the food industry will go after the mighty dollar without thinking twice about how a newly deployed strategy can impact the environment and our health. Think about it. Fast food with little or no nutritional value, ready-to-eat products and meal kits with excessive packaging have provided more convenience but undermine our ability to serve the planet or safeguard our wellness. It’s been like that for decades, but things are slowly changing due to an ever-empowered, social network-savvy marketplace. As a society, we realize our way of life is no longer sustainable. It is more than reasonable for consumers to ask the industry to comply with societal expectations.
Convenience is the main box being ticked when looking at home delivery service, but it can’t stop there. Grocers will need to think about ways to capture market share, while keeping consumers and the planet healthy. More choice for consumers may be desirable, especially when food is involved, but it can’t come at a huge cost for us all.