(And Why Online Grocery Isn’t Working Yet)

Do you remember when you could run into a store, grab a gallon of milk and run home in only a matter of minutes? That was a long time ago, but I remember it well. It was a simple experience with minimal time invested.

Run in. Run out. Done.

Then something happened. Marketing analysts revealed an interesting trend they dubbed “impulse buying.” In impulse buying, a customer is stimulated to make impromptu product selections based on attractive packaging, proximity, and price, rather than necessity. This new insight initially suggested that quick-grab items like candy and gum might drive incremental sales in the checkout line. Soon after, analysts devised a way to apply the same psychology throughout their entire store.

It was innocuous enough at first: putting a row of whipped cream and chocolate sauce in the freezer near the ice cream is pretty brilliant. Expanding on that idea, planning an entire aisle around picnic season can drive incremental sales in charcoal briquettes, lighter fluid and matches—on top of the staple cookout foods.

But there’s only so much cross-merchandising one can do in a grocery store.

So the plan reversed. Now, instead of pulling in a few extra dollars for a bottle of chocolate sauce, stores can increase average ticket exponentially by spreading staple items strategically throughout the store, forcing the path customers walk through their aisles. This allows grocers to practically guarantee an item’s visibility and increase exposure to key, high-margin items while repeatedly triggering your impulse to buy more stuff.

This is why flour is somewhere in the middle of the store, the bread section is so hard to find and milk is all the way at the back. The layout is designed to make you travel.

Grocery stores weakened consumer loyalty by sacrificing convenience.

And now, the stores aren’t doing so well anymore.

Just ask Marsh and Alpha Beta.

A trip to an enormous store like Safeway, Kroger or Walmart can require a significant investment in time. When you have a fridge full of groceries and run out of milk, what’s your first thought? Most of us think, “Where’s the easiest place to get that?”

The average person chooses the smallest, most convenient store they can find. Even if the price is higher.

The very fact that convenience stores carry milk and other staples suggests this scenario happens often.

This is why online grocery is going to work.

In my opinion, the real struggle so far is poor picking habits. I used online grocery once: my order arrived in a thousand tightly knotted plastic bags and my vegetables looked like they’d been scraped from the bottom of a hot barrel. I spent as much time clawing the bags apart as I would have spent slogging the store—and my produce was inedible.

That was the last time I tried online grocery.

Amazon saw the problem and developed Dash Buttons for convenient shopping. Even if this first iteration doesn’t work out, push-button shopping—or something like it—is the future, especially if physical stores continue to demand so much of our time.

Grocers need to find a way to compete with this kind of convenience, and they can start by bringing milk to the front of the store. Not on the “paid” side of the registers where shoppers will forget to buy it, but on a front endcap or at the beginning of an aisle where shoppers can grab it and go.

The stores that get serious about shopping convenience are the stores that are going to win.

 

.  .  .

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s