Cracking the Mobile Grocery Nut

Cracking the Mobile Grocery Nut

Summary: Supermarkets must address two conflicting realities in their search for the perfect marriage of mobile shopping and grocery shopping. Here’s how to solve for both.

TOPICS: ÜberTech

Writer's note: Like my colleague Bill Clark recently posted, this is also my first blog for Ubermobile. I've been working in mobile since 1996, back when few people had a mobile phone and most operators didn't even offer SMS services. A lot has changed in that time, and these changes show no sign of slowing up. I am looking forward to sharing my thoughts, ideas and occassionaly random comments on all things mobile.

So lets start with something we all have to do...

If you’re like me, you have a love/hate relationship with grocery shopping. I can enjoy strolling the aisles, reading the wine reviews, tasting a new cheese or two, giving careful consideration to each and every ice cream flavor.If I’m not pressed for time, that is. But if I am, which is more often the case, I’m grumbling as I slip between the doors just before closing to pick up the butter, bread or eggs I need for dinner or breakfast next morning.

These are the two conflicting realities facing supermarkets as they cast about to find the perfect marriage of mobile shopping and grocery shopping.

Pioneering food retailers: Listen up. I have an idea.

Except for the addition of the barcode scanning, grocery mobile apps so far have a serious case of déjà vu: order your food online or via mobile app, and it’ll show up at your door at some point in the future. WebVan, anyone? To be fair, that company flopped due to overinvestment in infrastructure, not lack of popularity. But still, there’s a limited market for grocery delivery. Most people don’t want to get their groceries delivered. In fact, two-thirds of online shoppers pick up their groceries (as reported by digital grocery service provider My WebGrocer).

People want to choose their own produce, wander the aisles to find new products, get a few free samples. Mobile can’t replace that shopping experience.

At the same time, most trips to the market include a certain amount of stocking up on the exact same staples we buy week.

What if grocers capitalized on this trend, making it easy to submit the boring stuff via mobile app in advance? Just poured the last bit of milk into your morning tea? Use your smartphone and the supermarket’s mobile app to scan the barcode and add it to your virtual shopping list.

Your local store could have your order packed and ready to check out when you arrive. Then you get to spend whatever time you have looking over the biscuits and finding the perfect bunch of bananas. It’s more convenient, and much more enjoyable. The shopping list app could even provide some guidance — the perfect bottle of wine to complement the cheese I’ve just selected at the fromage counter, for example.

This kind of arrangement would benefit stores as well, as they’d be able to devote more shelf space to the more expensive cheeses, wines, and other high-margin goods that make them more money—and give time-pressed shoppers a better experience.

Topic: ÜberTech


Diarmuid Mallon is the Director, Global Marketing Solutions & Programs – Mobile, which includes the SAP Mobile Services division and SAP Mobile solutions. He has worked in the mobile industry since 1996. Follow him here at ÜberTech and @diarmuidmallon.

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  • how much market is left?

    I haven't reached the point of buying paper towels and bags of granulated sugar online, but I have started buying cleaning supplies through Amazon. My wife found certain products for cleaning our wood floors, and those are the only ones she wants to use. They came from a local hardware store that has become flaky about keeping them in stock, so I found them on Amazon, and that's where I buy them now (for the last year and a half).

    Amazon seems to act as middleman for the manufacturer. How long before it decides to act as middleman for Proctor & Gamble, Kraft, Clorox, Kimberly-Clark, or Coca Cola? Once that happens, how much market share would be left?

    On a different tack, home grocery delivery was common through the 1960s. I'm just old enough to remember that. What made it work was many small grocers in every city, so if one grocer delivered dented cans, moldy bread or anything with obvious defects, customers switched to other grocers. IOW, huge business risks from delivering poor quality. Hard to see a dozen or so online grocers facing the same risks, so, as a consumer, I figure quality would be random at best.

    Also, consider your own example: the last drop of milk. Fine, add milk to your online order, and give the store an estimated pickup time of 4:30 PM. When does the store pack up your order? And what happens if you can't get to the store before 9:00 PM? Online just won't work for perishables or delicate products like potato chips. People want to pick out everything which spoils or breaks easily. What's left are packaged good with metal containers or where the product itself isn't easily broken (e.g., paper towels). Those things may work for online preorder or delivery, but very little else: not produce, not meat, not dairy, not baked good, not chips or cookies.

    Grocery stores and supermarkets will continue to exist for all the things most consumers wouldn't trust those stores to prepack for them. And for convenience, the other stuff which could be prepacked will still be available on the shelves. IOW, not much change other than risking hiring a few more people to prepack orders and hoping demand would be sufficient to fund their pay and benefits. Unlikely.
  • forgot another point

    High margin items: how does wine turnover compare to paper towels? IOW, what are the inventory carrying costs of high vs low margin products? Is it not possible low margin products may sell so much more frequently that the same shelf space dedicated to paper towels produces more profits than wine?

    Wine in particular: I live within 50 miles of the Napa Valley in California. There are several hundred wineries which could be classed as local. Not even warehouse-size Beverages & More stores would be able to carry 5% of available labels. I go into a specialty wine store if I'm looking for a perfect wine. I buy plonk from Safeway. That's not going to change, and I suspect I'm not that unusual.
  • Only commodity goods will be pre-ordered

    I agree with hrlngrv - the only grocery items I would order online are those which are all identical. I just got back from the grocery store: I looked at a dozen apples and bananas before I picked the 3 of each that were acceptable to me, and I picked the milk with the best expiration date. I could have pre-ordered the box of cookies and the shower cleaner, because I'm sure there is no differentiation between individual packages.

    However, I'm sure there are many people who would be happy with whatever was delivered to the door, the question for retailers would be, is that market big enough to implement the extra manpower to serve the requests.

    Another issue is that impulse purchases are probably on the higher margin items, the luxury chocolate or fresh baked bread. Discouraging people from visiting the store and making those impulse purchases is probably a bad idea for most grocery stores.
  • Geography

    All of your wishes are granted, if you move to the UK.

    All the major supermarket chains in Britain offer these services*, including Asda, which is now owned by your Wal-Mart.

    Our stores are generally smaller, but they serve a smaller area. This makes cheap home delivery feasible.

    It's a great system if your mobility is poor, or indeed if you simply can't spare the time. However, most people are happy to go and browse the shelves with their shopping list and get what they need. The stores are happier too, as people tend to buy more than they intended.

    *these include barcode scanning.
  • The Real Question- What Mobile Tools Do Grocery Shoppers Need?

    The mobile grocery services market is still in its early stages and many retailers find themselves frustrated and overwhelmed by the choices around which technology to incorporate into their stores.

    Consumers on the other hand have become so reliant on mobile.. apps in particular, that the focus of rolling out a mobile solution for grocers should depend solely on convenience and customer service.

    Many decision makers in the grocery industry don't know

    • there was a 75% increase in mobile app usage in the past year
    • that 4 out of 5 Smartphone users access retail content from mobile devices
    • that last year there was a 103% increase in shoppers viewing recipes on mobile phones
    • that mobile coupon users make 23% more shopping trips and spend 50% more each year

    Shoppers are looking for offers and coupons, deli order, recipes and the ability to make a shopping list. More advanced features are often ignored over simpler more basic functionality.

    Provide your customers with easy to use tools which save them time and money. That is what we know matters most to grocery shoppers.