COVID Musings 2
So, if traditional physical grocery stores are going to change due to a rapid shift in consumer preferences to online ordering and delivery, what else will change?
First and foremost, groceries will need to completely re-think their customer facing model. In store displays, end cap promotions, flyers etc. do not add value. What adds value and creates differentiation is the customer facing application and the effectiveness of the delivery method.
If you are willing to spend millions of dollars per physical store to make your stores attractive and easy to visit, you should take that budget, multiply by the number of stores you have, and spend that much on your customer facing application and the effectiveness of the delivery method.
One immediate impact could be that large stores, like Krogers, will recognize that they don't want their customers in the hands of a specialized third party delivery app and service. If not already doing so, they need to develop their own in-house resources, tied intimately to their pricing, promotion, customer tracking and inventory systems.
This app and the delivery service will become the primary point of customer facing competitive differentiation in the market.
More on this app tomorrow.