Fast Five Shorts | Kroger And Schnucks Enhance Their Quick Delivery Offerings Via Instacart
In the latest edition of Omni Talk’s Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Mirakl, Simbe, and Ocampo Capital Chris Walton and Anne Mezzenga discuss: Kroger And Schnucks Enhancing Their Quick Delivery Offerings Via Instacart
For the full episode head here: https://youtu.be/mJ9TENRdNnE
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Transcript
This one is the rare dual headline because both Schnooks and Kroger have upped their quick delivery game.
Speaker A:According to Grocery Dive, Schnooks Market is piloting late night delivery out of a fulfillment site in Ellisville, Missouri.
Speaker A:Customers can place orders from the Schnooks or Instacart site and get groceries after 10pm when the grocer's local stores are already closed.
Speaker A:The fulfillment site, which was formerly a Straub's market, I hope I'm saying that correctly, has home goods, drinks, prepackaged food, fresh produce and alcohol, the St.
Speaker A:Louis Post Dispatch also reported.
Speaker A:And not to be outdone, according to Chain Storage, the Kroger company is also partnering with Instacart for its new express delivery service.
Speaker A:Customers can shop express delivery orders directly from the Kroger website and digital app, receiving the same prices, savings and rewards found in store.
Speaker A:And members of the $99 per year level of the Boost by Kroger plus loyalty program always get free deliver delivery on Express Delivery orders.
Speaker A:Yes, and I always love saying Boost by Kroger plus Loyalty program.
Speaker A:That's my rolls off the tongue program.
Speaker A:Yeah, just rolls off the tongue, doesn't it?
Speaker A:Woo.
Speaker A:I know you have a lot of marketing thoughts on that one.
Speaker A:And why do you think we are seeing a rush of quick delivery headlines this week?
Speaker B:For one reason, and that is the headline that I feel like fell under the radar as part of Walmart's earnings last week and that is that Walmart is now reaching 93% of households with same day delivery.
Speaker B:Let that one sink in.
Speaker A:Great point.
Speaker B:You look at the announcements from Kroger and Schnooks, the hours are exactly the same.
Speaker B:They're delivering until midnight and then they're starting back up at 6am which is what Walmart already does.
Speaker B:And ultimately Chris, this all comes down to what are my options, you know, if I go on Instacart or if I go to Walmart.
Speaker B:Plus the second I get home from second shift at night and I need groceries, do I care where they're from?
Speaker B:Probably not.
Speaker B:I just want to get them at that time when I need them, when I want them.
Speaker B:And so I think it's a great opportunity for, I mean even even though it's indirect, I think competition with Walmart, I still think it's a great opportunity for schnooks and for Kroger because.
Speaker B:And especially for schnooks because if I've never ordered from schnooks before but I go on Instacart and They're the one that's available.
Speaker B:It's the same thing with Save a Lot that we saw, you know, a couple of weeks back with their, their format.
Speaker B:Like I don't care who the grocer is, I just, I want my eggs and my bread and my milk and my bottle of wine or whatever it might be when I get home at that time.
Speaker B:And so I think you, you're also gaining new customers in a way that you probably wouldn't have been able to before by not offering the service.
Speaker B:So I like it, I think it's smart.
Speaker B:I think the bigger headline here though is Walmart's, Walmart's coming for you grocers and you need to be prepared to have that same offering to hang on to your customers.
Speaker B:But what do you think?
Speaker A:Yeah, I agree with you at the start and then I disagree with you slightly so let me explain why.
Speaker A:So I think, and you mentioned the point about Walmart yesterday, I think that's.
Speaker A:Yeah, that's crazy.
Speaker A:93% of the country, you know, is within same day now I think.
Speaker A:Right, and that's, that's what statistic you quoted and what it makes me think about too is I wonder if the, the level to which Walmart has been pulling the high income shoppers is not hurting all of grocery too because you know, I think about these types of services and the thing I started about is these are, these are expensive, these cost money and so the people that are gonna, that are gonna utilize them the most are probably the people that can afford them.
Speaker A:And so, and those are your best shoppers traditionally too.
Speaker A:Like the best shoppers that make the most trips, that engage with you the most digitally.
Speaker A:So I'm wondering if Walmart is starting to pull them, you know, across the nation and that's why you're seeing this.
Speaker A:I don't know, it's something I started to think about.
Speaker A:I have no idea.
Speaker A:I'm sure, I'm sure our friends at Schnooks will tell us if we're, you know, on the right page with that.
Speaker A:The part where I disagree with you slightly is, and it's not so much a disagreement, it's just, I think it's another wrinkle is like, I think given that if that's the case then the grocers have, the grocers have to do this right.
Speaker A:That they have no other choice but to do it.
Speaker A:But by the same token, unlike Walmart, I worry they don't have the same basket of higher margin items helping to defray of these efforts.
Speaker A:Yeah.
Speaker A:You know, or the number of deliveries going out.
Speaker A:So why you have to do it?
Speaker A:I don't know that it's economically sustainable to do it.
Speaker A:And that's the question I have.
Speaker A:And so, you know, again, it just goes back to.
Speaker A:Walmart has done a really, really good job here of differentiating themselves in the marketplace, particularly when it comes to grocery and quick delivery.
Speaker B:Right, I know, I think you're right.
Speaker B:And excuse me, another thing I think this will bring into the fold is what investments then do like schnooks and, and even Kroger, like Kroger is working with Ocado to help fulfill these orders.
Speaker B:But what investments will snooks have to make upstream too to be able to support this?
Speaker B:Like will they have to get into micro fulfillment to make it worth it?
Speaker A:You have to find a way to lower the costs.
Speaker B:Right, right, absolutely.
Speaker A:But they are doing that.
Speaker A:It sounds like because it's a dark store.
Speaker A:Right.
Speaker A:That they.
Speaker A:Formerly there was a.
Speaker A:Formerly enough.
Speaker A:So that's an interesting wrinkle here too.
Speaker A:They are.
Speaker A:Yeah.
Speaker A:Seems like they're looking at that.
Speaker A:We don't know to what degree they are, but.
Speaker A:Yeah, that's a great point.
Speaker B:Right.
Speaker B:Well, lots, lots to come and especially from that Walmart headline, 93%.
Speaker B:I just, I still can't get over it.
Speaker B:It still is astonishing to me, but I guess it makes sense.
Speaker B:They're, they're.
Speaker B:Walmart is moving at a pace that not a lot of people can compete with right now.
