Grocers Push for Direct Fulfillment Amid Industry’s Digitization

This week in grocery news, Ahold Delhaize USA grocers adopt new direct ordering apps, Ocado reportedly doubles down on automation, and online discount grocer Martie launches nationwide.

Multinational grocer Ahold Delhaize’s United States eCommerce arm, Peapod Digital Labs, announced Wednesday (Oct. 4) the launch of a native mobile app, with the grocer’s Stop & Shop and Food Lion brands launching apps with this technology, where before their only mobile direct ordering channel was the grocers’ websites.

“Efficiency wasn’t the only priority,” Peapod Digital Labs Director of Mobile Engineering Paul Yang said in a statement. “It’s also our aim to create a more modern interface with aesthetic representative of each of the brands, complete with animations to bring moments of delight into what is typically a transactional experience.”

The news comes as grocers step up their direct ordering capabilities as Instacart grows, fueled by its recent initial public offering (IPO).

A small share of consumers buys groceries online via mobile devices, but that share is likely to grow soon, according to PYMNTS Intelligence. “Tracking the Digital Payments Takeover: Catching the Coming eCommerce Wave,” created in collaboration with Amazon Web Services (AWS), drew from an April survey of nearly 2,700 U.S. consumers.

The results revealed that 12% of grocery transactions occur online — 6% via mobile devices and 6% via computers. Yet the same study found that about 1 in 3 shoppers said they are very or extremely likely to increase their online grocery purchases in the next year.

Ocado CEO Reportedly Pushes Back Against Automation Skepticism

British grocery technology company Ocado Group, which licenses automation and eCommerce solutions out to grocers, is maintaining that the economics of automated warehouses work, despite criticism and skepticism, Bloomberg reported Wednesday.

“Our clients at the moment are rolling them out not as fast as we would like, but we’re working on that,” founder and CEO Tim Steiner said, per the report.

His comment comes after U.S. grocery giant Kroger, which is reportedly the tech company’s biggest buyer, slowed and then paused the expansion of its automated grocery delivery fulfillment centers created in partnership with Ocado.

“Right now, all the energy is focused on the [automated fulfillment centers] we have and making sure that those are where we want them to be, where they need to be and on a sustainable basis,” Kroger Chairman and CEO Rodney McMullen told analysts on the grocer’s earnings call last month. “… A ton of work is being done. We’re making progress, but we wouldn’t be to the point where we would start focusing on additional sheds until we make sure that we have a clear path on the ones we have.”

Demand for grocery delivery is sizable, PYMNTS Intelligence found. “12 Months of the ConnectedEconomy: 33,000 Consumers on Digital’s Role in Their Everyday Lives,” which drew from surveys of tens of thousands of U.S. consumers, revealed that by November, 40% of consumers reported that they had ordered groceries online for home delivery in the previous month.

Discount eGrocer Martie Expands Nationwide

In additional grocery delivery news, value-focused eGrocer Martie, which sells overstock items at discounted rates, is seizing on demand for lower-cost options, launching nationwide as many consumers struggle with the cost of leading providers.

The company announced the expansion Wednesday, shipping shelf-stable goods across the country.

“We are thrilled that every person in this country will have access to surplus items at a discounted rate, including specialty and premium items,” CEO and Co-founder Louise Fritjofsson said in a statement. “Martie promises significant savings and to always stock our online with the essentials you know and need.”

Many consumers are looking for discounted and low-priced grocery items. PYMNTS Intelligence’s report “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” which drew from a survey of more than 2,100 U.S. consumers, revealed that 44% of grocery shoppers are deal chasers, willing to go wherever they will get the best price.