MOBILITY

Sainsbury’s Argos acquisition boosts digital reach

BY Deena M. Amato-McCoy

By the holidays, customers of J Sainsbury Plc will be able to take advantage of more mobile capabilities.

Leveraging its acquisition of the Home Retail Group, which closed last month, Sainsbury will begin adding Argos branches or click-and-collect distribution points inside almost all of its stores, according to a recent Bloomberg article.

The acquisition added 739 Argos outlets and three Habitat home-furnishing stores to Sainsbury’s portfolio, which already consists of 601 supermarkets and 782 convenience stores around the U.K. More than a dozen mini-stores and collection points already operate inside Sainsbury’s shops, and 19 more will open before Christmas, the article said.

Sainsbury is further raising the bar on delivery times with tests of a mobile app, called Chop Chop, which offers same-day deliveries in south London, the Bloomberg article mentioned.

To read more, click here.

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TECHNOLOGY

Costco, UPS team up with University of Washington on omnichannel project

BY Gina Acosta

The University of Washington is teaming up with Costco, UPS, Nordstrom and other stakeholders on a new project that aims to improve the way consumers receive their goods.

The SCTL Center Urban Freight Lab says it will beworking to improve the management of both public and private operations of urban goods delivery systems. Urban Freight Lab members plan to engage in strategic applied research projects at the SCTL Center, and help identify priority problems for future research.

Founding members of the SCTL Center Urban Freight Lab include:

  • Costco
  • Nordstrom
  • UPS

According to theSCTL Center Urban Freight Lab website,the dramatic increase of online retail sales and changing expectations in social networks are driving new forms of goods delivery. In the first quarter of 2016, U.S. online sales were almost 8 percent of total retail sales, an increase of 15 percent from the first quarter of 2015.

"Imagine a building concierge, who used to receive and hold a few flower bouquets behind his counter, trying to sort and store groceries for 700 residents every week in the lobby," a statement on the website says. "When 3 million people living and working in greater Seattle purchase 10, 25 or 50 percent of their goods online and have it delivered to their door, there is tremendous pressure on the city to rethink the way it can manage street infrastructure, and on building operators to plan for the influx of online goods."

The Urban Freight Lab says its research is analyzing processes, developing potential solutions, and piloting operational improvements in the final 50’ of the urban goods delivery system. The final 50’ of the urban delivery system begins at the city-owned curb, commercial vehicle load zone, or sidewalk; extends through privately-owned building freight bays; and may end in the common areas within a building such as the lobby.

Read more about the project by clicking here.

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TECHNOLOGY

Walmart outlines 3 reasons why forward-leaning retailers are bullish on curbside pickup

BY Michael Johnsen

With its recent acquisition of Jet.com, a commitment to growing its online grocery business with a convenient grocery pick-up option and an extensive investment against delivering a seamless digital shopping experience, Walmart is once again flipping the script on what it means to compete for America's shopping dollar.

The company's investment in grocery pick-up services represents the cover of that new script – and Walmart is expanding that service to 600 stores this year and 500 stores next year.

"There are new customers coming to Walmart because of online grocery," Doug McMillon, president and CEO Wal-Mart Stores, told analysts. "It's more an offensive category than a defensive category."

"We now have it in 80 U.S. markets or 500 locations. We'll be in 100 markets or approximately 600 stores by the end of this year," noted Greg Foran last week during the company's analyst day. "When we add online grocery, it improves the rest of the store, not just food, but GM as well. We lift our game," he said.

There are at least three facets to delivering the what, when and where on the customer's terms that make this a significant course redirection. First, McMillon noted that grocery pickup draws new customers to Walmart. Also, the service engenders a fierce loyalty among those customers who have tried it. Finally, the service represents a significant 70% to 80% cost savings as compared to those retailers playing the same-day delivery battle by eliminating the last mile of delivery.

"Actually one of the key things about grocery home shopping is the loyalty it drives to the store as well," noted Judith McKenna, COO Walmart U.S. "And if you think about the ecosystem that we're building between our online business and our physical business, actually encouraging people to use all of the channels that's available to them is really important," she said, adding that customers who take advantage of curbside pickup represent larger marketbaskets overall as compared to customers who don't.

Beyond customer acquisiton and loyalty, there are supply chain efficiencies associated with curbside pickup.

"Logistics will continue to lean into the future, as I said, about how goods are moved and delivered," Brett Biggs, CFO and executive VP Wal-Mart Stores, told anlysts last week. "We are really excited about how our capital allocation is changing. It's being geared more toward the future," he said. "The primary difference is in Walmart U.S. and it's from movement of capital from new stores to increased remodels and other strategic customer initiatives like fresh and online grocery."

"The foundation has been laid in terms of the warehouse network," added Marc Lore, president and CEO Wal-Mart ecommerce for Wal-Mart Stores. "Bringing together both marketplaces – there's 20 million products on walmart.com [and] there's 15 million on Jet – we have two separate teams, bringing those catalogs together so both companies benefit," he said. "Leveraging the store capabilities with in-store pickup, I think, is a huge advantage because it avoids last-mile delivery costs, which is about 70% to 80% of total delivery cost. If you're able to fulfill stuff in an e-commerce warehouse and you have enough volume to linehaul stuff directly to the store, your cost to ship is $1 a package. It's an incredibly powerful asset."

Both Walmart and Jet are currently experimenting with different ways to get food to the consumer, Lore added. "Right now, on Jet, we are shipping direct to the home from a centralized DC, about 15 million people we're serving right now and we'll continue to expand that. At the same time, you have the acceleration happening in online grocery pickup at a Walmart store. And so one thing is for sure, we're going to be really focused on winning in fresh and consumables over the next couple of years. And we're just not quite sure what the final best way to do it is, but we're experimenting."

And Walmart isn't the only savvy retailer seizing the on the pickup opportunity. CVS in September announced its intention to grow its order-online-curbside-pickup program to 4,000 stores. "The response and adoption of CVS Curbside from our customers has been very positive," Brian Tilzer, CVS Health senior VP and chief digital officer, told Drug Store News. "We actually saw CVS Curbside as an added convenience and way to create more visits to our store," he said. "Through our pilot testing, we found that on average, basket purchases were larger through online delivery and Curbside pick-up versus in-store."

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