Posts Tagged ‘Wal*Mart’

Service of Where’s the Milk? Confusion When Grocery Stores Move Things Around

Monday, October 8th, 2018

Photo: aldridgeonline.com

If you routinely visit a grocery store that’s being remodeled, you know your shopping expedition will take longer than usual while you search for the milk, favorite cookies or pasta. One of my favorite stores also keeps switching things in the meat department even though its renovations are over. There must be a good reason, other than to hope I become tempted by other items while looking for what’s on my list.

Expecting to pick up a bag of M&Ms at the checkout counter at a grocery chain? Soon some will have freezer cases placed in front instead. Heather Haddon wrote about the motivation behind major product location shuffles as stores prepare for increased orders placed online for in-store customer pickup. They hope these customers, as they wait for their order in the front of the store, will add a few major items–an ice cream cake, a few frozen dinners or bags of fries and veggies–rather than a pack of gum or a candy bar. She wrote about the displacement of impulse items and other anticipated changes in her Wall Street Journal article “E-Commerce Reshapes Grocery Stores.”

Photo: supermarketnews.com

Americans spend $800 billion a year on food and drink, she reported, and supermarket chains don’t want too big a chunk going to Amazon and other giants. Haddon wrote: “E-commerce represents less than 5% of U.S. grocery sales currently, but food and beverage sales are growing far faster online than in traditional supermarkets. Forrester Analytics predicts that by 2022, the U.S. online grocery market will total $36.5 billion, up from an estimated $26.7 billion this year.”

According to Haddon, Walmart and Kroger are “spending tens of millions of dollars to acquire digital-ordering technologies, implement home-delivery systems and build thousands of store pickup points for online orders. Kroger, the U.S.’s largest supermarket chain, has hired or assigned nearly 19,000 workers to run an estimated 1,400 pickup sites for online orders, covering roughly half of the company’s stores.”

Photo: edgylabs.com

Haddon identified risks for the chains from the enormous upfront investment to irritating traditional customers who compete for goods whisked off shelves to fulfill online orders. Currently, supermarkets don’t have warehouses as Amazon does, though they may in future.

Meanwhile, “Clerks fulfilling online orders can clog aisles and checkout lanes or pick over the best produce, customers and grocery consultants say.” Haddon concluded “Through it all, grocers are struggling to find a balance between encouraging customers to place orders online and drawing customers into their stores.”

Do you shop for your groceries online? Are you tempted? It must be a time-saver to simply show up at a store and drive away minutes later with packages of groceries. Does the concept work for cities where people don’t usually own cars? Would you miss seeing what’s new in categories such as ice cream, frozen food, bakery and yogurt? Do you ever pass an aisle, see something like mustard or strawberry jam which reminds you you’re about to run out? How will internet ordering gain such purchases without irritating customers with popup suggestions?

Photo: petco.com

Service of a Crack in the Surface of E-Commerce

Monday, September 10th, 2018

Photo: physics.aps.org

A Wall Street Journal article about traditional retailing and E-commerce made clear that those who see the latter annihilating traditional retail shouldn’t order the funeral flowers just yet. Some retailers of both luxury and discount goods are spending big bucks on their brick and mortar stores. In a second article the same day the Journal reported that WalMart has started to refuse to ship heavy items–because of the cost– by claiming they are out of stock. This approach may be temporary and therefore, potentially less significant in the long run.

What’s In Store?

Photo: pinterest.com

Target was also a focus of John D. Stoll’s Wall Street Journal article, “Tiffany’s $250 Million Bet on a 78-Year-Old Store.” He wrote “It turns out that all over the ravaged retailing sector, companies are rethinking the mantra that the future is digital, and pouring money into actual brick-and-mortar stores.” Target plans to spend $7 billion. It doesn’t break down the superstore’s expenditures though “a spokeswoman said stores are an ‘incredibly important linchpin.’”

Why this confidence in physical stores? Stoll wrote: “Because the bulk of America’s retail is still done the old-fashioned way. Target has consistently increased online sales, but ecommerce represents less than 6% of its revenues. Online sales are closer to 7% at Home Depot but under 4% at Walmart.” Tiffany’s stores produce 90 percent of its revenue.

Photo: logos.wikia.com

PricewaterhouseCoopers’ annual Consumer Insights survey showed weekly purchases from stores has risen from 36 percent four years ago to 40 percent in 2015 and 44 percent this year. Stoll wrote: “Retailers are smart to better integrate the physical shopping experience with people’s online habits, but now is not the time to give up on making stores better.” On a recent Wednesday, he reported, Tiffany’s new café in its NYC flagship had 1,000 on a waiting list for 40 seats.

Cupboard is Bare

So what about Walmart’s shipping policy? People need the products involved such as household cleaners, nonperishable groceries, pet food and cosmetics so they will buy them somewhere.

I marvel at how CVS often covers the cost of shipping heavy items with no minimum purchase required, in conjunction with a sale many times, and wonder how long the windfall will last.

Photo: walmartcareers.com

Sarah Nassauer in her Wall Street Journal article wrote that the Walmart “has begun telling online shoppers that some products in its warehouses are ‘out of stock’ after the retailer changed its e-commerce systems to avoid orders deemed too expensive to ship.” Some suppliers were surprised. To address the policy they’ll “stock their products at more Walmart warehouses around the country to keep sales steady, according to an executive at a large food company.

“The shift is part of a test, Walmart said, to see if it can deliver more products via ground shipping, a cheaper option than air shipping, in two days or less.” Spokesman Ravi Jariwala “said shoppers shouldn’t notice a big increase in out-of-stock items because walmart.com will suggest similar products from nearby warehouses.”

Do you think retailers like Tiffany’s and Target are throwing away their money in this retail climate by upgrading their traditional stores? Is there an aura about some stores—like Tiffany’s—that compels shoppers to visit? Will retailers figure out cheaper ways of shipping heavy goods or will customers increasingly pick up in stores their online orders deemed too heavy/expensive to ship? Walmart says it’s a test but if profitable, don’t you think the “shortages will be permanent, potentially impacting online sales? When you buy online, do you stick to your shopping list more than you do when you’re in a store?

Photo: flickr.com

Service of Retail

Monday, October 20th, 2014

shop in store

It’s too early to predict what the success of Amazon’s first store will be—if it actually happens–as we don’t yet know precisely what the New York City venue will offer. Amazon has gone in this direction before and changed its mind.

Nevertheless, Greg Bensinger and Keiko Morris’s article, “Amazon to Open First Brick-and-Mortar Site The New York City Location to Handle Same-Day-Delivery Inventory, Product Returns,” in The Wall Street Journal, intrigued me, even though it doesn’t share the full picture because the reporters don’t know either.

amazonThey wrote about the 34th Street off 5th Avenue future venture: “The Manhattan location is meant primarily to be a place for customers to pick up orders they’ve made online, but will also serve as a distribution center for couriers and likely one day will feature Amazon devices like Kindle e-readers, Fire smartphones and Fire TV set-top boxes, according to people familiar with the company’s thinking.” Who these people? Are they are the same throughout? Bensinger/Morris repeated this phrase many times.

The article doesn’t mention whether customers will see more product than what you’d see at a Verizon or T-Mobile outlet. To me, along with great merchandising, seeing great stuff is the essential part of visiting a store. The reporters wrote that the “flagship store, would mark an attempt by Amazon to connect with customers in the physical world.” But picking up a box or getting it to my office or apartment the same day I order it doesn’t count as “connecting with me.”

The reporters note the popularity of retailers such as Wal*Mart and Macy’s [down the street from where this store would be] who take internet orders that customers pick up with the obvious benefit of potentially making additional sales. The customer, already committed to a purchase that is low in labor costs–nobody has to restock a shelf—may just buy more. But if there’s nothing much to see at Amazon’s 34th Street location, there goes that advantage.

34th streetI’ve lived for years in NYC and in upstate New York. Pickups in my car at a Poughkeepsie Mall are no-brainers. NYC is a different matter. There are some with limos and drivers, but if you count on getting a cab to drag home heavy things from midtown, depending on time of day you might be waiting a long time.

On the other hand, there are thousands who couldn’t take advantage of delivery because they live in apartments without either doormen or friendly neighbors who work at home and will accept packages. Some work for companies that forbid employees to ship personal items to the office.

Should reporters wait until they get the skinny from a source they can quote rather than going with information from many “people familiar with the company’s thinking?” What do you think of people who leak proprietary information to the press?

If you go out of your way to visit a retailer to pick up a package do you want to see other merchandise while you’re at it? Isn’t one of the benefits of buying online the delivery factor–why would a company need a half-baked retail space?

  flagging taxi

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