Speed Isn’t Everything: Why Grocers Need to Carefully Weigh 10-Minute Delivery
Updated: Nov 18, 2021
On-demand programming has been a staple of media consumption for many years. You want it now, you can get it now. But… on-demand groceries?
Some companies are now offering ten-minute (or less) grocery delivery—upping the stakes for third-party vendors like Instacart. However, could this focus on speed be the result of tunnel vision?
Tom Furphy, CEO and Managing Director of Consumer Equity Partners and CEO of Replenium, and Kevin Coupe of Morning News Beat, discuss potential pitfalls of this approach in the latest episode of the Innovation Conversation— a virtual discussion platform that explores various facets of an increasingly technology-driven retail landscape.
Solving the Logistical Challenge
The logistics required to fulfill ten-minute delivery have to be very well-planned. Think about the amount of time it takes individuals just to get to the store, shop, and get back home again. It’s likely much more than ten minutes.
Companies must have the appropriate staff, limited SKUs, optimal location, and an ability to get out the door in rapid-fire pace. Given all that, there’s as much opportunity to disappoint the customer as there is to delight them. “If you make speed the core of your value proposition, and you’re not able to deliver on it, that seems dangerous,” notes Coupe.
Of course, with risk comes the potential for reward. These companies are spending capital to optimize the process, so they are able to meet and exceed their customers’ expectations. The grocery industry is already quite complex but has been able to mitigate previous logistical challenges with success.
But… It’s More than Just Logistics
While logistics play a key role in such “ambitious” delivery, Coupe and Furphy both agree that the real focus should be on the customer experience. This is something Amazon has been able to accomplish with its Subscribe & Save option, paving the way for other auto-replenishment entities. Foundationally, auto-replenishment works to lighten the consumer burden.
“You can use machine learning to free up time for folks, give them good visibility so they know exactly what they need, as well as the ability to modify. Something that might take 25 minutes now takes five,” states Furphy. “You’re really taking care of the customer by starting with them, obsessing over their needs, and then working backward to build services that accomplish that.”
Why Tactics Are NOT Strategy
Coupe and Furphy adamantly agree that ecommerce is not simply an “alternative delivery system.” Whether customers are shopping in-store, curbside, or via delivery, retailers still need to find ways to foster customer loyalty—and reach a level of intimacy that enhances CX.
“If you’re not activating that piece of the puzzle, you’re just making it a logistics play as opposed to being a customer service plan,” cautions Coupe. “It’s really important to think beyond the tactical and think about the strategy, which is all about customer understanding and customer service.”
In this regard, the most innovative retailers are crossing industry boundaries to enlist data scientists and customer loyalty experts from the hotel and airline industries—sectors that have well-established loyalty program strategies. Even smaller retailers that may not be able to budget for such expertise are finding creative ways to be more customer-focused. This will become even more critical as the momentum created by the pandemic starts to slow.
“I think we’re going to see some separation between those that are really focused on building great programs for their customers and treating them as valuable individuals and those that aren’t,” shares Furphy. “It’s a lot less about logistics and channels and more about recognizing the value of a customer across those channels. Treating the customer in a way that makes them feel valued and understood. That’s where the ultimate magic is going to be unlocked.”
Watch for future Innovation Conversations between Kevin Coupe and Tom Furphy by subscribing to the Morning News Beat YouTube Channel.