Why Grocery Stores Should Think Like Startups

With studies predicting as many as one-third of consumers will order groceries online in 2017, it’s time for brick & mortar grocery retail chains who aren’t yet taking advantage of eCommerce to realize they can no longer ignore this trend.

The question is, how do you as a traditional grocery executive start to address it? As the founder of GrocerKey, I submit you need a new frame of mind — one that involves thinking like a startup. You’re going to be building a new business. When you’re in a whole new ball game like this, one thing that’s required is experimentation.

Startups are built on such tinkering. And when you’re creating something new, you too will have to tinker.

A lot is changing in the grocery industry. Among the many changes are the following:

  • The rise of eCommerce and digital engagement
  • More pressure to utilize space and staff appropriately as in-store sales are flat and competition is increasing
  • Creating an experience that appeals to a new shopper

Tinkering leads to rapid iteration, and that leads to the discovery of new solutions.

grocery store startups

eCommerce grocery is new for most brick & mortar grocery chains and it presents major issues that need to be resolved. Among those primary issues are the following:

  • Where do you place a staging area — your in-store warehouse? It’s the area where eCommerce orders are stored until they are picked up or delivered to the customer.
  • What service(s) will you offer — click & collect, delivery, on-demand delivery, scheduled delivery, and/or unattended delivery?
  • What assortment will you offer — full selection, or using the 80/20 rule to focus on top movers?
  • How will you handle out-of-stocks? Will you provide a replacement chosen by the picker and provided to the customer at no cost? Will you allow customers to select their own replacements? Or will you leave out-of-stock items out of the order?
  • What about pricing? Will you have in-store pricing or marked-up pricing? How will you price the click & collect fee or delivery fee appropriately? Will you honor promotions and coupons?
  • Finally, how will you handle integrations — loyalty, POS, item file feeds, and so forth?

You can always research and evaluate your market and study your competition, but until you tinker in your own environment you won’t know definitively what’s right for your store.

What to know more? Ask me what we’ve learned at GrocerKey helping grocery chains make the leap to eCommerce. Click here to get in touch!