Retail

Grocery Roundup: DSW Tries Selling Shoes In Supermarkets, Amazon Fresh Expands, Costco Misses An Opportunity

Costco

The race among the nation’s grocers carried on this week, as the big names continued attempting to expand their influence throughout the sector. Well … almost all of the big names. Questions surfaced around whether Costco is keeping pace with the industry’s changing pulse or is falling behind.

This week’s big headlines:

Costco’s Missed Opportunity On Curbside Pickup

Is Costco missing the boat on curbside pickup? That’s an alarm that’s been increasingly sounded as many grocers dive into digital ordering and curbside delivery, but Costco notably lags behind.

CNN reported the chain continues to maintain that curbside pickup doesn't make sense, mainly because Costco doesn't have the space and wants customers to come inside anyway.

But experts say the chain’s insistence that consumers come in during the COVID-19 pandemic might be an error at a time when 25.5 million households ordered groceries online and picked them up at stores. That’s up from just 10.1 million households that do so at the same time last year.

Kantar analyst Timothy Campbell said Costo is simply behind the times on this one. “They risk falling behind if they don't invest in pickup,” he told CNN. “You have customers establishing routines with other retailers.”

Costco Chief Financial Officer Richard Galanti responded that the chain is thinking about curbside pickup, but added, “We don't see a lot of members asking for it. And we do offer other alternatives.”

But jumping in with pickup isn’t going to be an easy switch for Costco given its stores’ cavernous designs and bulk-buying options. Galanti said the chain would need to reconfigure its stores, but the company said that’s too expensive given Costco’s thin profit margins.

Plus, Galanti said the chain doesn’t really want customers staying in their cars. “We want you to walk the warehouse and see what we have to offer,” he said.

But consumers worried about COVID-19 might not be interested, which is why Costco rival Sam’s Club has fully embraced curbside pickup.

“In the [pandemic] environment, our members have valued quick and contactless shopping experiences,” Eddie Garcia, senior vice president and chief product officer at Sam's Club, told CNN.

Adding curbside pickup “was an easy decision for us,” he said.

Hy-Vee And DSW Pair Up

For those who have found themselves wishing they could go shoe shopping in the middle of a grocery shopping trip, the Hy-Vee supermarket chain has a solution.

The Midwestern chain recently added DSW Designer Shoe Warehouse “shop-in-shops” to Hy-Vee’s Minneapolis-St. Paul area stores.

“By combining in-store and online-shopping experiences together with DSW, we are able to meet the unique needs of every shopper and make the shopping experience — whether in-store, online or both — seamless,” Hy-Vee Chairman, President and CEO Randy Edeker said in announcing the tie-up.

The new mini-shops will feature items for women, men and children. Customers can try on both fashion and athletic shoes while picking up their weekly groceries. The shop-in-shops also contain digital showroom walls that show 100 of the season’s top trending shoes.

Consumers can buy shoes using QR codes and the DSW Web site and have the goods sent to their residences or a pick-up locker at the Hy-Vee. Shoppers can also use their VIP rewards and promotions at the shop-in-shops.

Hy-Vee and DSW have opened or will soon open shop-in-shops at six Twin Cities-area supermarkets. The supermarket chain said it also intends to open “several more” shop-in-shop locations across its eight-state region in 2021.

Second Amazon Fresh Location Is Coming To Suburban D.C. 

Amazon plans to soon open its second Amazon Fresh brick-and-mortar store, this time in the Washington D.C., suburb of Gaithersburg, Md.

The 31,000-square-foot store will soon take the place of the freestanding Office Depot in a retail center within the town. It will join a recently opened Los Angeles-area site as the eCommerce giant’s second Amazon Fresh store.

Amazon had already confirmed the Gaithersburg site wouldn’t be a Whole Foods, a chain that Amazon acquired in 2017. But the new Amazon Fresh site will quite a bit larger than Amazon Go and Go Grocery stores also planned to elsewhere in the D.C. area.

The Maryland location will also reportedly be joined by another D.C.-area Amazon Fresh grocery store in suburban Fairfax, Va. Amazon had initially planned to add a Whole Foods there.

While other Amazon Fresh locations are reportedly planned, the company has yet to confirm further specifics.

But in the race for grocery dominance, everyone is trying such new things in a bid to supply consumers with further convenience. What will those offers be and will they actually succeed in benefiting consumers?

That remains to be seen as the race to disrupt the grocery business continues to be run.

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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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