Prime Delivery. The New Milkman?

September 20th, 2018

One thing that is notable about 2018:  it’s been a big year for brick and mortar retailers to close a lot of doors. Headliners, of course, include Sears, Toys R Us and J. C. Penney, but a recent USA Today feature lists 21 companies closing retail locations – and that was just as of April!

This list of notable names did not touch on the grocery retail category in a big way. But with the appetite Amazon has for expanding categories, and the responses of retailers, both national (Walmart) and regional (Meijer), a couple questions that have been on my mind are:

  1. What’s in store for the future of traditional grocery retailers?
  2. How will “big brands” be marketing within the new grocery landscape?

There was a day when my children would look at me funny when I talked about “the days before my mother had her own car”, when milk and other dairy products would be delivered to our side door, courtesy of the milkman.

Fast forward to this afternoon, and they will squirm if I ask one of them to run TO the store for me while I tend to meetings. Old enough to drive, but still in a pre-independent adult phase, the notion of “going shopping”, even for groceries, seems so pre-millennial.

Certainly, mountains of empty corrugated shipping cartons are testimony to the degree to which we’ve succumbed to the allure of online shopping and home delivery. Indeed, groceries are already beginning to arrive at our house by delivery van, but they are typically niche items, those that are impossible to find at the private-label-loving mega-retailer which owns about 80% of our market.

But what is currently a trickle of grocery deliveries to our house is bound to become a stream and possibly a river eventually, as Kroger has now jumped into the home delivery pool for groceries. One report projects online grocery sales to reach 20% of the market by 2025.

Kroger, with its intense focus on building a private label portfolio, is just one retailer that’s made life challenging for branded products of all sizes. What are further marketing implications of the home delivery model? How are brands preparing for advertising, promotion and merchandising? What does it mean for that dirty word – “slotting”?

Paradigms are changing and the new retail landscape is a challenge for all brands, large and small. Watch for more posts on the new frontiers of eRetailing in the weeks ahead. We’ll be looking at winners as well as laggers, and the dynamics that can create success.