Bending over to reach the backache pills

A photo of backache relief medicine has been circulating on social media recently. Seeing it inspires a “duh!” moment: If you have a backache, it’s going to be hard to bend over and pick up the medicine from the bottom shelf—and never mind getting close enough to read the offer on the tag.

Source: https://i.imgur.com/1l41Xjm.jpg

So…why did this happen?

Odds are that the back relief subcategory within the pain relief category doesn’t sell as well some other subcategories, such as general purpose pain relievers. The better-selling products get preferential placement, at eye level. But that rote decision ignores the fact that the users of backache relief medicine really need the product to be shelved a bit higher off the floor.

Paco Underhill, founder of Envirosell and author of excellent books about consumer psychology, tells a story in his book Why We Buy that highlights how important shelf placement is:

Another such “accident” of patient observation and analysis happened during a supermarket study we performed for a dog food manufacturer. When we staked out the pet aisle, we noticed that while adults bought the dog food, the dog treats—liver-flavored biscuits and such—were often being picked out by children or senior citizens. We realized that for the elderly, pets are like children, creatures to be spoiled. And while feeding Fido may not be any child’s favorite chore, filling him up with doggie cookies can be loads of fun. Parents indulged their little ones’ pleas for treats here just as they did over in the cookie aisle.

Because no one had ever noticed who exactly was buying (or lobbying for the purchase of) pet treats, they were typically stocked near the top of the supermarket shelves. As a result, our cameras caught children climbing the shelving to reach the treats. We witnessed one elderly woman using a box of aluminum foil to knock down her brand of dog biscuits. Move the treats to where kids and little old ladies can reach them, we advised the client. The client did so, and sales went up overnight.

Source: Jeffrey O. Gustafson (GFDL, CC-BY-SA-3.0 or CC BY-SA 2.0), via Wikimedia Commons

Similarly, Underhill writes, cosmetics, clothing, and drugs for older and heavier customers aren’t perceived as glamorous and therefore receive less-than-prime shelf real estate, usually on low or high shelves. This attempt by store managers to raise the visibility of “sexier” items makes it hard for shoppers to physically retrieve those products intended for them—which leads to poorer sales, perpetuating a cycle of permanent exile in a poor location.

Considering the buying power of aging Boomers and the growing waistlines of American shoppers, this is a bad strategy.

When planning where to shelve an item, consider the following five points.

1. Who is your consumer? Will they need your product to be shelved in a particular place to see or reach it?

Cereal and snacks targeted toward children are common examples: These products are often on low shelves, the better to see them and influence parents to buy them.

Kid in a candy store. Source: https://www.flickr.com/photos/rumpleteaser/6062027375

2. Is there a special need? Will visibility in a certain place help?

Many stores have portable racks with umbrellas that they move to the front of the store when it is raining—especially stores where many shoppers arrive on foot or via public transportation. This placement gives shoppers an immediate solution for a problem they might have: being wet.

3. How big is the product?

I worked on a new product that was just a little taller than most of the products in its category. The manufacturer wanted it to be shelved with comparable items, but it was taller by just enough that it didn’t fit on the shelf.  The top shelf was the only place where it would fit, which is not what the manufacturer wanted.  Size is an important consideration when developing packaging.

4. Do you want consumers to compare your product with others?

I worked with a well-known snack brand, and one of their leading products was shelved with cookies and crackers. Our research found, though, that shoppers commonly substituted this product with chips and pretzels. By not being shelved with those items, the product wasn’t part of the consideration set for undecided shoppers. Another brand I worked with had a low-price offering and always wanted it to be shelved next to store-brand items so that shoppers could easily compare prices.

5. How will it be placed in a shopping cart?

One Northeast retailer always placed its large bundles of paper towels on the bottom shelf, a common enough location for large and heavy items. They had a goal of trading shoppers up to larger sizes (with the related higher prices), and they found that moving the large bundles to higher shelves increased sales because they were more visible. They had feared that shoppers would struggle to maneuver the bundles, but given the light weight, the higher placement turned out to not be a problem. Large, heavy bags of dog food and cat litter didn’t receive the same treatment.

These questions are just a start, and they will help you do your homework before you ask for specific shelving locations. Remember that if your shelf placement varies among retailers, you should analyze the unit movement for each placement to see what works best.  This analysis will give you the best evidence that one placement works better than another.

Related: What the heck are planograms?

Instacart’s secret markups accidentally disclosed

A curious post about Instacart appeared recently on Reddit’s Boston subreddit that deserves some attention in grocery retail.

Instacart delivers groceries and other products from a range of retailers. Here in Boston, they deliver from Whole Foods, Costco, CVS, Star Market/Shaw’s, Market Basket, Russo’s, and Petco, plus some liquor and specialty stores inside the more urban parts of the area. My family and I are regular users. (You can try the service yourself with my referral link, which will get you and me both $10.)

Grocery delivery truck circa 1941
An early version of Instacart. By Jewish Historical Society of the Upper Midwest, via Wikimedia Commons.

Originally, the service didn’t disclose whether the prices were the same as in-store or different, and that changed in 2015 with clearer disclosures.

Some retailers are official partners and the prices online match what’s available in-store. But many retailers available on the platform aren’t official partners, and it’s no secret that Instacart’s prices are “15%+ higher than in‑store,” as disclosed when shopping. The plus symbol leaves a lot of latitude, leaving the extent of the mark ups opaque for consumers.

That brings us to the Reddit post, which made the mark up practices much clearer.

The message writer received an Instacart delivery where the order picker accidentally left the store receipt from Market Basket. The customer compared the price he paid versus the amount Instacart charged and posted the details. I took prices from the scanned receipts and made some charts to help understand how and where they were marking up prices.

Comparison of prices charged by Market Basket vs. Instacart

It’s interesting to see how the markups vary by product, with some staples having low (and even negative) markups. Market Basket is rightfully known for having low prices, and I wonder if Instacart is using what it knows about prices in other stores to raise low in-store prices to be similar to what it sees across retailers or even across markets.

Comparison of costs at Market Basket vs. Instacart

Overall, Instacart marked up prices by 43%. Add the delivery fee ($5.99 flat) and service fee (10% and optional), and it comes to a 64% markup on groceries that cost $86.35 at Market Basket. That’s $55.30 to cover Instacart’s cost of shopping and delivery.

(Note: The service fee is separate from a tip, a change that Instacart made in late 2016, to the confusion of customers and anger of their contractor shoppers. The service fee is optional but selected as a default, and a tip is also optional but set to zero by default. And when faced with defaults, most people leave them as-is.)

Sure, it would be straightforward to make this comparison by simply looking at prices in store, but those who are paying to have groceries delivered to them probably aren’t taking the time to visit a store to observe actual prices. So, is it a good business practice to have such an opaque markup practice? That’s up for discussion and will likely get some attention from regulators as Instacart and its competitors grow.

By comparison, here in Boston, Ahold Delhaize’s Peapod (referral link for $20 off) offers delivery for $7 to 10 depending on order size, a $60 order minimum, and disclosure that prices may differ from in-store at Stop & Shop or Giant. Local chain, Roche Bros., offers delivery for a $10 fee with the same prices as in-store, and no order minimum. Tipping is optional with both.  (Edit: Tipping is optional with Peapod, and Roche Bros. employees are not allowed to accept tips.)

Some more miscellaneous points:

1. The cost charged for russet potatoes looks like it might have been a mistake. Instacart charged $4.25/pound, which is a steep increase over the typical $1.00 or less per pound I pay, even at Whole Foods, and more than the $0.59/pound shown on Instacart’s Market Basket page. So if we count this as an outlier and make the markup for that item zero, Instacart still has an overall markup of 32% for the products in this order.

2. The tax is interesting. Market Basket charged $0.52 and Instacart charged $0.84. Instacart paid $0.52 to Market Basket and then collected an extra $0.32. I don’t know what the rules are, nor do I know how Instacart handles the surplus tax, but I know the details here have tripped up companies in the past.

3. A follow-up post indicates that Instacart’s CEO, Max Mullen, reached out and made adjustments to the order of $10.39, which I am guessing is mostly the high-priced potatoes.

4. Instacart just raised $400 million at a valuation of $3.4 billion.

Trends from the 2017 Winter Fancy Food Show

Before the recent Winter Fancy Food Show, I served up some trend predictions that we might see at the show.  Let’s revisit those predictions.

Giant cheese wheels at the 2017 Winter Fancy Food Show
This display of cheese wheels was impressive and very tall. Inside the wheels was a space for booth staffers to meet with food buyers.

Using food processing byproducts creatively: ReGrained upcycles spent grain from beer brewing and turns it into “Eat Beer” bars. They tasted like a cross between a cookie and a nutrition bar.

Coconut: In some form, I saw coconut as an inclusion in many products, from protein shake powder and nutrition bars to seaweed snacks and chocolates. Dang had its coconut chips (and some new non-coconut rice snacks that were delicious).

Cooking made easier: I was surprised that meal-kit companies like Blue Apron haven’t started to show up with retail-ready offerings.  But I did see some fun make-it-yourself kits.  Back to the Roots sells kits to grow your own mushrooms. And Brooklyn Brew Shop sells beer, wine, and cider brewing kits.  (And both companies have expanded beyond those core offerings to a variety of herb, cheese, and baking kits.)

Healthier frozen treats: Arctic Zero, with a low-calorie focus, and Snow Monkey, loaded with superfoods, showed their frozen desserts.

Dairy alternatives: Milkadamia makes macadamia nut milk and Dahlicious makes yogurt from almond milk. Califia Farms has introduced a wide variety of new items based on almond milk and had a good presence at the show.

Low-carb offerings: This trend was present across the show, especially with snack foods.  I saw it most notably with a continued large number of meat snacks from brands like Vermont Smoke & Cure and Duke’s. I especially noticed a lot of meat sticks, as if Slim Jim has grown up.

Some other fun things I saw:

The Summer Fancy Food Show will be June 25-27, 2017 in New York City.  See you there?


Project NOSH’s staff picks from the show:

And some of my photos:

Predictions for this week’s Winter Fancy Food Show

I’m in the air on my way to the Specialty Food Association’s Fancy Food Show in San Francisco, where I’ll be for the next 3 days.

I’m planning to post some photos and highlights from the show (as I’ve done in the past). But in the meantime, what food trends are people talking about for 2017?

Source: https://www.flickr.com/photos/embajada_ecuador/5961922786

Here are some trend predictions from Instacart, Whole Foods, and Consumer Reports that I will be looking for:

  • Using food processing byproducts creatively. For example: Sir Kensington’s Fabanase no-egg mayo made with chickpea cooking water, or drinks made with cascara, the outer husk of coffee cherries that are often discarded after harvesting beans.
  • Coconut as an inclusion or core ingredient in more products.
  • Cooking made easier: Items that make meal prep easier but don’t require purchasing a full meal prep kit delivered to your house.
  • Lower calorie frozen treats, like Arctic Zero and Halo Top. They can’t can’t technically be called ice cream but are hard to distinguish from the real thing.
  • A growing proliferation of dairy alternatives. This will move beyond the established soy and almond milks to coconut, hemp, and flax milk.
  • New low carb offerings: Paleo and Whole 30-friendly items are the descendants of the Atkins craze of the mid 00s, and I’m expecting to see more of them.

If you’ll be at the show, I’d love to meet up.  Please leave a comment here or contact me.

Stocking up for the holidays is important for manufacturers, too

As I was shopping for my family’s holiday meals this year, I was reflecting on full aisles in the supermarket and check-out lines snaking through the store.  It seems when the holidays come, everyone heads to the supermarket.

This is important for food and CPG manufacturers to keep in mind as you plan out your year.  Even non-food items have sales upticks as supermarket traffic generally increases.

Source: https://www.flickr.com/photos/brizzlebornandbred/13619444923

Sales spike in most categories during the weeks around Thanksgiving, Christmas, and Easter.  (Some categories have additional weeks with extra-high demand, like cocktail mixers for summer holidays like Memorial Day, July Fourth, and so on.)

It’s great news for manufacturers. But it requires planning to work well.

Some emerging manufacturers get caught by surprise when a flood of orders arrive to meet seasonal demand.  Supermarkets are accustomed to these cycles and will place orders accordingly (and ideally with guidance from your sales team or broker). This sometimes leads to urgent production to fill orders — and sometimes even leads to unfilled orders for those who are caught off guard.  (This has happened with big companies that I’ve worked with, not just the small ones.) It’s important to build up enough inventory to meet demand.

Once you leave a supermarket with an empty shelf they can’t fill, you’ll end up on the “naughty” list, which will come back to haunt you.

For an idea of how dramatic the seasonal spikes can be, see this example below .  This is a category in the bakery department, showing weekly unit sales at a supermarket retailer. Sales during Christmas week are more than 3 times higher than in low-demand weeks.

Though I was reflecting on seasonal replenishment cycles as I was shopping, I had some other thoughts, too.  This year was so eventful, personally, professionally, and for our world. I hope 2017 is extraordinary for everyone reading this.  Sending good wishes for a happy, healthy, prosperous new year.

Half the money spent on advertising is wasted

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

Many attribute this quote to John Wanamaker, the founder of the department store that bore his name. The quote is attributed to others, too, but the source isn’t important. What’s important is that it’s incredibly hard to know if advertising is working or not. Marketers perpetually struggle with this.

Source: https://static.pexels.com/photos/128242/pexels-photo-128242.jpeg

In 2009, I saw results of work Google did with Lipton Tea. Google ran ads for a new white tea alongside search results, on YouTube, and on its display network. If these ads had been on TV or radio, it would be difficult, if not impossible, to measure the impact on retail sales. Even with online advertising, it would typically be difficult to make that connection.

But Google and Lipton took their analysis a step further in two ways.

First, They used comScore’s online panel to measure the difference in web engagement with Lipton assets between those exposed to the advertising and those who didn’t see it. They also conducted survey research to understand how the advertising affected attitudes and opinions toward Lipton and this new tea.

Second, and most interesting, they tied online ad viewers (and non-viewers) to Kroger loyalty cards. From there, they measured whether actual purchasing behavior changed. In a real sense, Lipton measured the change in sales attributable to its advertising effort.

Let that sink in for a minute. The researchers could tell if someone had seen an ad. And if a person saw the ad, they could measure whether or not their purchasing behavior changed.

Lipton dollar sales per household increased by 26 percent, which is far from trivial. (See the full results.)

Though this research is now 7 years old, I’m surprised to have not seen it used more broadly in the industry. In the past few weeks, I’ve seen links to not-so-new revelations of Google’s ability to track when users visit specific stores in real life. If you run an ad for a retail location, you can track whether those who saw your ad visited your store or not. See Search Engine Land’s 2015 article on how this works, and another article that mentions how PetSmart and Office Depot use these metrics.

Measuring sales for individual consumers is just getting started and I think there will be much more to come. As ordinary consumers, we’re all going to start receiving much more targeted advertising. (And I think this will make ads more interesting for most people.) And marketers are going to have unprecedented ways to have their messages spread effectively.

Making travel just a little more pleasant

This year, I’ve been on the road more than ever, which is one of the perils of working as a consultant.  Over time, I’ve accumulated a variety of junk that I haul around  in my bag to make life a little bit easier while away from my home base.  One colleague likened my bag to Mary Poppins’ magic bag (which I am hoping was meant as a compliment!).

This is a departure from my usual food/CPG industry writing, but I know there’s many readers who travel as much as I have, and I hope you can find a little something useful to take away, or find something to share with a frequent traveler in your life.

travel-gear

1. Pencil case: Carries many of the pens and other tiny things in this photo. I have the Nomadic PE-08, which appears to have been discontinued and replaced by the PE-18, but any small case will do.

2. Umbrella: It doesn’t happen often, but when it does, it is terrible to be caught in the rain.  I carry a Lewis N. Clark umbrella.

3. Power strip: This might be the most useful things in my bag.  It converts a single power outlet into four.  I’ve made many friends in airports and meeting rooms when we all need to charge up at the same time.  My model is discontinued (and it has a piece of electrical tape on a part that lights up, which was very annoying in dark hotel rooms), but some like this Accel model, which includes some USB ports.

4. Back up power: I can get about 4 iPhone charges out of my old Anker, and newer ones can charge 7 times.  I can get about 75% charged in 30 minutes.  It’s a life saver when a call goes way longer than expected and your battery is almost dead – and you’re not anywhere near a power outlet.  I’ve loaned this charger to coworkers and even strangers and it has made their day.

5. Tide pen: This can often remove a stain without much residue. And I drop food on myself all the time.

6. All sorts of charging and connectivity implements:

7a. Writing implements: My favorite pen (Uniball Jetstream), a highlighter, and a Sharpie (not shown).  Sometimes some whiteboard markers if I expect it to be useful.

7b. Mouse: If you have the luxury to work at a table top or desk while on the road, Logitech’s Marathon Mouse makes it so much more comfortable to mouse around, especially if you’re doing a lot of Powerpoint.

8. Headphones: I buy at least two of these at a time because I seem to lose them.  My Panasonic earbuds are great, and I wrap them around a wrap thing from Sumajin, which keeps them from being a big jumble in my bag or pocket.  I have a bag of extras of the soft earbud tips at home because they seem to fall off and get lost.

If you want to splurge, the Bose QuietComfort noise-cancelling earbuds are ridiculously amazing. It’s amazing how much of the world they can filter out on an airplane or in a noisy airport or train. The earbuds work nearly as well as the giant headphones and take up a fraction of the space in your bag.

9. Medicine: I hate needing to track down a place to buy common medicine when an ailment strikes.  I keep ibuprofen, Immodium, and cold/allergy medication in my bag.  There’s no reason to carry the full container, and I’ve found these small baggies to be a great way to carry a few doses of each with me.  You never know when something is going to strike, and it’s helpful to have some common stuff on hand without taking up too much space. The baggies go inside my pencil case. I also like to keep a cheap nail clipper with me in case of an annoying hangnail or neglected long nails.

10. Notebook: I’ve liked the Moleskine large notebooks for a long time, and the Evernote edition is great, in that you can snap photos of pages and they import to your Evernote account.  There’s even some handwriting recognition that allows you to search handwritten notes.  It’s not perfect, but when it works, it’s so cool.

Some other stuff not shown:

  • Snacks: I have Kind bars (madagascar vanilla) and GoodnessKnows bars just in case I need to eat.  Sometimes it’s tough to fit in a meal before a meeting, and having a boost of calories at the right time can be very helpful.
  • Shaving: At 0.5 oz, this shaving oil takes up so much less space than a shaving cream container.
  • Airport security: Sign up for PreCheck or Global Entry.  It makes the security process so much more pleasant.  No worries about removing liquids, placing your laptop in a bin, or taking off your shoes and belt.  It’s like a throwback to how security was in the 1990s.  PreCheck is $85 and valid for 5 years but only works in the U.S.  Global Entry works in the U.S. and some places outside the country, too, and it costs $100.  (I signed up for PreCheck before learning about Global Entry, so I’m less familiar with it, but it seems worth the extra $15 if you ever plan to travel outside the U.S.)

(Note that I’ve chosen these products through my own trial & error, and most of these links are Amazon affiliate links.)

Are there any travel hacks you’ve found? I’d love to have you share them in the comments.

The story of self-checkout

I probably consume more media via podcast these days than any other format.  (I have such a large queue of shows I listen to that I speed them up by 25% so I can fit them all in.)  One of the earlier podcasts to get a big following is NPR’s Planet Money, born out of the 2008 financial crisis.  From its beginning with explaining the root causes of the housing crisis, they have broadened their reporting to so many little known nooks and crannies of the global economy.  It’s a great show and worth listening to regularly.

supermarket_self_checkout

Source: https://commons.wikimedia.org/wiki/File:Coles_supermarket_Self_checkout.jpg

One recent topic was supermarket self-checkout machines.  Did you know that an ER doctor invented the first self-checkouts in his spare time?  The first pilot ran in a Price Chopper in the mid 1990s.  Not what I expected at all.  Listen below.


Listen above or go to: http://www.npr.org/sections/money/2016/10/19/498571623/episode-730-self-checkout

You get what you pay for

If you’ve been into a Walmart in the past few years, there’s a good chance you were disappointed in your experience. You weren’t the only one — Walmart’s management agreed with that sentiment.

The New York Times recently reported, “Shoppers were fed up. They complained of dirty bathrooms, empty shelves, endless checkout lines and impossible-to-find employees. Only 16 percent of stores were meeting the company’s customer service goals.” To boot, Walmart’s same-store sales numbers had dropped for five quarters, and total revenue actually dipped for the first time in the chain’s history.

walmart-check-outSource: https://www.flickr.com/photos/walmartcorporate/5684720360

During that time, I was making the rounds of Walmart stores to check on new items my company had in distribution. I’d often pick up household necessities while making those visits, and I continually had a hard time finding common items. I remember looking for diapers for my daughter and found vast swaths of items to be out-of-stock. For the variety of diapers we used in my daughter’s size, I had to borrow a mop from a nearby aisle and climb up onto a shelf to sweep the very last box available off that shelf. And there was no one around to help me.

What was less visible to shoppers was the intense cost-cutting measures behind the scenes. Walmart’s wages had dropped to a point where they could not attract quality employees, nor did they staff enough of them. They even eliminated the famous greeters that had graced the entrances to its stores for more than three decades. Founder Sam Walton would not have been pleased — he championed the idea of greeters and thought they had many benefits: to make Walmart shoppers feel special and well treated so they would return, and to prevent shoplifting in a benign rather than tough-cop way. (Walton’s autobiography touches on this topic and much more of his thinking.)

Once they saw the balance sheets, however, Walmart’s management realized they had cut too deep. In a video-feed address to its 1.2 million U.S. employees on Feb. 19, 2015, Walmart CEO Doug McMillion said, “Sometimes we don’t get it all right. Sometimes we make policy changes or other decisions and they don’t result in what we thought they were going to. And when we don’t get it right, we adjust.”

And adjust they did. Over the past 18 months, Walmart’s average non-managerial wage has increased 16 percent compared to 2014. For a price-driven retailer, that’s not trivial.

Though not discussed in the NYT piece, Walmart took an unprecedented step to move some financial burden to its vendors at the same time it announced that it would be increasing wages.  Payment terms were extended from typically 10 days to as much as 90 to 120 days, with an “early payment” discount of 2% still applying.  Additionally, new fees of 1% to hold inventory in Walmart warehouses were instituted, along with a one-time charge of 10% of the value of inventory shipped to new Walmart stores and DCs.

Employees are undoubtedly happy to have higher pay. Walmart also made moves to allow greater scheduling flexibility and better access to training for more opportunities for advancement, hence even higher wages. The goal is to help employees feel part of an organization that respects their work. I suspect this will lead to higher employee satisfaction scores. And, yes, same-stores sales have started growing again.

This mirrors findings from some of my past professors’ research, which found that employee satisfaction leads to customer satisfaction, which in turn leads to improved sales. To connect the dots: as employees become happier, sales become better (notwithstanding the increased employee shopping at Walmart, now that they’re making more money).

There’s a point when cost-cutting goes too far, and Walmart clearly found that point. Nearly unique among huge companies, though, is the speed at which it took action to make a change and reap the benefits.

As a result, I haven’t had to climb any shelves lately to grab a lonely box of diapers. Happier, better-paid employees are more available around the store. Greeters are back. Walmart is getting what they are paying for.

Manufacturers: If you supply (or aspire to supply) retailers like Walmart, it’s important to know that when you sit across the desk from a retail buyer on a sales call, they might have a lot more going on than is apparent on the outside. During the time I called on Walmart when they were cutting costs, it wasn’t perfectly clear to me as an outsider that they were feeling pressured and, in retrospect, it was an enormous burden on the people I was meeting with.

When you have your meetings, can you probe to find out what your buyers are challenged with? Can you help them meet their goals and not just yours?

Why doesn’t everyone use online grocery?

I answered this question on Quora, where I enjoy answering questions from time to time.  One came up recently wondering why people still go to the supermarket when one could just order via one of the online grocers that has popped up in recent times.

The question:

Why do many people still go regularly to the supermarket when they could save time ordering grocery online & getting it delivered to their home?

Thinking about it… they could save money for the gas too if they regularly use their car to do the shopping. Is it a matter of customer experience? How buying grocery offline is better than doing it online? Is it a matter of habit, & people need to get used to it as we got used to buy books online?

I’ve heard this line of reasoning from friends who are close to the tech industry and think it’s obvious that everyone will glom on to the latest innovation.  (I once heard some aspiring tech innovators suggest that children’s’ toys and games could be made irrelevant if they could just make iPad apps that were good enough.)

My answer, as I wrote on Quora:

A glance at Instacart’s Service Areas would make one think that they have already locked up coverage across much of the U.S., but it’s far from the case. I crunched some numbers quickly against metro area population counts, and Instacart serve maybe 25–30% of the population. It might even be less if I wasn’t as generous in some of my counting.

If you add some other providers like Google Express, Peapod, Amazon Fresh, FreshDirect, etc into the mix, they may bump up overall coverage to something higher, but it’s far from a majority of the U.S. population.

But if we focus just on those who can order groceries online, there’s other good reasons to avoid online grocery shopping.

  1. It’s too expensive. Instacart marks up prices from some supermarkets by an amount they don’t disclose, plus sometimes a delivery charge of $4–6 — or more with “busy” pricing — plus tip. And you can’t take advantage of coupons or in-store sale prices. Amazon Fresh costs $300/year for a subscription, on top of the price you pay for food. I think the online services will always be at least a little more expensive, as they need to cover the cost of their operations.
  2. It’s not fast enough. When we ran out of diapers for my daughter the other night, no one could get them to me fast enough. I needed to simply get in the car and go to the store.
  3. It’s inflexible. When the services are busy, you might have to specify the delivery window many hours (or even a day) in advance. That means you have to be home to accept the delivery or take the risk that your groceries might spoil. If something comes up at work and I can’t get home on time, I’m in trouble.
  4. You can’t choose the bunch of bananas you want. Someone else is doing the shopping for you. So the bananas might be too green. Does the chicken look spoiled? Is that melon just ripe enough? And some services, like Google Express, don’t even deliver perishable items yet.
  5. It can be hard to find stuff. I was trying to find a certain flavor of ice cream that Iknow is carried by a store, and it just wasn’t coming up on a search. If I had been in the store, I would have known exactly how to find that item. In fact, I possibly could have driven to the store near my house and actually bought the darn ice cream and been back home in the time it took me to figure this out.
  6. Services make mistakes. Once I ordered a pint of strawberries from an online grocery service. For some reason, they delivered 16 ounces worth of strawberry yogurt. Not quite the same. So I then had to make a trip to the store to buy strawberries. And do something with the yogurt I didn’t want. Some people don’t want to deal with these annoyances and would rather just do things themselves.
  7. Some people like to shop. Even though it’s not rational or efficient, some people enjoy going to the store and browsing.

But, like Joshua Herzig-Marx says, there is no doubt there has been success in online grocery and some real shifting in the industry. I’ve found online grocery to be incredibly helpful when I’ve been crunched for time — and especially when my daughter was an infant and it was tough to leave the house. While I think there will be more migration in the years ahead, there’s always going to be a place for traditional bricks & mortar grocery shopping.