Originally printed in the April 2018 issue of Produce Business.
In the ever-evolving world of retail many organizations have adopted strategies to combat companies such as Amazon that are offering grocery ordering and delivery.
In fact, within the retail grocery industry, there are various organizations that offer services of selecting and delivering products to consumers. Many major retailers now utilize similar “click-and-order” systems to allow customers to select their grocery orders online and have them delivered to their homes or picked up at the store. Management thinks this to be a revolutionary way to reach Millennials and other groups to increase and defend the company’s piece of the retail landscape, while maintaining its position within the industry.
Although this is timely given the way the Internet and social media rule nearly every aspect of life, management is missing an opportunity to utilize the strategies that go beyond maintaining market share.
When this topic is discussed, and suggestions are made to enhance the experience, management many times will ignore them and instead maintain the system it has in place. Because of this stance, management proves again that “it just doesn’t get it!”
Online customers cannot make “impulse” purchases from the abundant displays at store level. Because of this loss, the percentage of total sales on Internet orders is much less than orders placed in store.
In most programs, consumers submit an order to the store via its website. The order is then converted to an in-store order, and an employee circulates through the store, selecting the items on the list and scanning them onto an invoice. The completed order is then ready, either to be picked up at a designated spot near the store or delivered directly to the customer. There are varying costs associated with this type of order, depending on the store.
The associate handling the order is generally an entry-level employee. Management sees this as efficient and cost-effective. These individuals are trained to use a handheld scanner. The only exception is usually in the deli, where employees ask the clerk behind the counter to process and fill the order. The regular process used in the rest of store is also used in the produce department. It is in this area where the opportunity lies to generate additional sales in produce.
We are aware of the results from this program and the lack of sales opportunities for the produce department. Online customers cannot make “impulse” purchases from the abundant displays at store level. Because of this loss, the percentage of total sales on Internet orders is much less than orders placed in store.
Additionally, the use of entry-level employees is a detriment to sales. Having observed many of these in-store employees, they utilize the same process that they do in any of the other grocery or non-perishable departments and simply pick up the item, the PLU code or sticker on the fruit, and place it in the “cart.” Little or no attention is paid to the quality of the product or any selective measurement of the produce.
In fact, sometimes the only involvement from the produce side is produce personnel directing these “shoppers” to select the produce that needs to move (in other word, needs to be rotated out of stock) to lessen their workload and improve the appearance of the department. It is in this area where the real opportunity lies to utilize Internet ordering to benefit the produce department. Again, it involves a commitment/investment in training these selectors to recognize and select quality produce at the proper stage for these order.
This pays dividends in two ways. First, it makes for increased satisfaction with the Internet order. Second, it plants the seed in the minds of customers that this store always has quality produce. Any visit to the store will allow additional exposure and purchase of superior quality. It also reinforces the store’s image of being the best place to get their produce either through the Internet, in the store, or both.
Although it would require additional resources to train select personnel, it could potentially raise sales by utilizing online system. It seems more natural to do this than simply sitting back and accepting the lower percent of total produce sales on Internet order. It would behoove retailers to look at these potential benefits and join in taking advantage of the changing landscape of retailing to benefit their produce departments
Don Harris is a 41-year veteran of the produce industry, with most of that time spent in retail. He worked in every aspect of the industry, from “field-to-fork” in both the conventional and organic arenas. Harris is presently consulting. Comments can be directed to [email protected]oducebusiness.com.