Retail

Grocery Roundup: ALDI Flirts With Online Ordering, Walmart And Target Optimize Floor Plans And Grocers Stock Up On Essentials For The Holidays

grocery cart in store

It’s been a busy time in the grocery world this week, with the theme being one of making upgrades across the board. How consumers order, how they pay and how they interact with a store’s environment all got announced upgrades at various big names in the game.

The latest developments:

ALDI Dips Into Digital 

German-based discount-supermarket giant ALDI announced a great leap forward into the world of digital sales this week with word that it will be piloting a new “click-and-collect” online grocery ordering program at a single U.K. location. The chain plans to then quickly expand the service to 15 stores across the country.

ALDI has heretofore resisted making a switch to online sales over concerns that the chain’s already thin margins weren’t well-suited to the not-always-profitable model of selling groceries online.

“We have to make sure that whatever we do fits with our low-cost model,” Giles Hurley, head of ALDI’s operations in the U.K. and Ireland, told the Financial Times. “That is absolutely critical.”

However, Hurley further said the pilot is still a few steps removed from a full commitment to an online ordering expansion. He said ALDI needs to see how well the pilot does in what the chain said will be a very rigorous trial.

ALDI has also experimented with some online ordering and pickup as the pandemic wore on, offering a small selection of items through Deliveroo at some of its London stores. But such digital dabbling to the side, reports indicate that ALDI continues to focus on its brick-and-mortar stores, with plans to add hundreds of new ones over the next few years.

Stockpiling For The Happiest Time Of Year 

U.S. grocers and food distributors are not only stocking their shelves with items as the holiday season draws closer, but are also stockpiling them in advance of potential big demand if COVID-19 cases start surging.

Taking to heart warnings from some health experts who say America could see a widespread COVID-19 resurgence, grocers are preparing at a time when consumers are already likely to buy more than usual because of the holidays.

“We started talking about Thanksgiving in June. That’s earlier than we ever have,” Chris Testa, president of organic food wholesaler United Natural Foods, told The Wall Street Journal. He said the firm has stocked up on cranberry sauce, herbal tea and cold remedies.

Anthony Hucker, CEO of Southeastern Grocers (parent of Winn-Dixie and other chains), told the paper that early orders for holiday food staples like ham and turkey are well ahead of normal.

Associated Food Stores, a cooperative that supplies supermarkets, said it’s started to build what it calls “pandemic pallets” of sanitizing products. “We will never again operate our business as unprepared for something like this,” company executive Darin Peirce told the WSJ.

International grocery giant Ahold Delhaize also reported that it’s started ordering more food to stock up for the season.

Amazon Tells Payments To Talk To The Hand 

Amazon this week introduced the latest piece of in-store retail tech: the human hand.

The eCommerce giant’s new Amazon One system will allow shoppers to pay at some Amazon Go stores by simply waving the palm of their hands over a reader, which will connect a palm print with a user’s stored card information. Consumers can either scan their hands as they walk into an Amazon Go location or use the system on the way out.

Amazon One is coming to two Amazon Go stores in Seattle first, with plans to add it soon to sites in Chicago, New York and San Francisco. Amazon also intends to license the technology to rival merchants as well.

Dilip Kumar, Amazon’s vice president of physical retail, told CNBC that Amazon One had been in the planning stages long before the pandemic. “I encourage people to try it, see how they like the experience, and then go from there,” he said.

But whether rival retailers — many of whom see Amazon as a dangerous competitor — will be willing to try it and see how they like remains to be seen.

The Race To Redesign The Store: Walmart Edition 

While Amazon was making moves to reset in store checkout this week, Walmart announced that the shopping experience within its locations will be getting digital-friendly redesigns for holiday shopping during the pandemic period.

Walmart's redesign efforts focus on directing shoppers around stores during what the chain anticipates will be the most foot traffic it’s seen since the pandemic took hold in March.

The new in-store experience will partly push consumers toward digital channels. For instance, the chain is updating all signage to include the Walmart app icon, as well as encouragement to download it. Walmart is also making in-store signs brighter and bolder to make them more effective in getting customers to the right part of sites as easily as possible.

“We were inspired by airport wayfinding systems as best-in-class examples of how to direct large groups of people,” Janey Whiteside, Walmart’s executive vice president and chief customer officer, said in a statement. “We developed simple yet thoughtful designs to replicate these navigation efficiencies, which will help us move customers through the store more quickly. We also optimized product layout, bringing greater visibility to key items throughout the store, including dedicated in-store sections for electronics, toys, baby products and more.”

Stores will also include self-checkout kiosks, as well as Walmart Pay and other contactless-payment solutions to limit contact between customers and store associates.

Walmart plans to implement the new design in nearly 200 Supercenters and some select Health Centers and Neighborhood Markets by the end of this fiscal year. That number will then grow to close to 1,000 stores by next fiscal year.

The Race To Redesign The Store: Target Edition 

Target also announced big changes in how it’s managing foot traffic. The chain plans to double staff dedicated to its Drive Up and Order Pickup services, and the company is training additional team members to help during peak shopping hours.

Target said more than 90 percent of its digital orders are fulfilled by store teams, but that it will also prepare its distribution centers to send more inventory to stores with more staff. It will also increase front-of-store team members to disinfect carts, provide masks to shoppers and encourage social distancing.

“The success of our business strategy rests on the strength of our team and their ability to adjust quickly to the needs of our guests and their changing shopping patterns,” said Melissa Kremer, Target’s chief human resources officer. “Throughout the year, the team has successfully balanced strong demand in our stores with surging digital volume. Knowing that the holiday season will be unlike any other, we’re building in even more flexibility to make sure Target remains a safe and convenient place to work and shop.”

It seems that plenty of changes are coming to the grocery industry just in time for the holiday-shopping season -- even among players like ALDI, which had held out against it for a long time.

Which changes will successful draw in the consumers?That’s a question we’ll continue to answer each week in PYMNTS’ Grocery Roundup.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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