Kroger brings on big partner to fuel online grocery delivery
The nation’s largest supermarket company has entered into a deal that may give it an edge in the online grocery delivery wars.
Kroger Co. is extending its partnership with U.K.-based online grocery retailer Ocado, a company that has a reputation for fast deliveries, innovation, and high-quality customer service. Kroger will be Ocado’s exclusive partner in the United States, a move that will enable the grocer to leverage Ocado’s smart platform, which supports online ordering, automated fulfillment and home delivery capabilities.
Specifically, Kroger will leverage Ocado’s digital and robotics capabilities to automate and better manage warehouse operations, logistics and delivery route planning. The program coincides with Kroger’s Restock program, which focuses on the company’s accelerated commitment to digital and e-commerce efforts.
This year, Kroger and Ocado plan to identify the first three sites where it will develop new, automated warehouses. The partners will identify a total of 20 sites over the first three years of the agreement.
“We are actively creating a seamless digital experience for our customers,” said Rodney McMullen, Kroger’s chairman and CEO. “Our partnership with Ocado will speed up our efforts to redefine the food and grocery customer experience – creating value for customers and shareholders, alike.”
The deal augments Kroger’s existing relationship with the company. The grocer already had approximately a 1% stake in Ocado. Through the new deal, Kroger will increase its existing investment by 5% in a subscription rights agreement, bringing its total investment to more than 6%.
“The opportunity to partner with Kroger to transform the way in which U.S. customers buy grocery represents a huge opportunity to redefine the grocery experience of Kroger’s customers and create value for the stakeholders of both Kroger and Ocado,” said Tim Steiner, CEO of Ocado Group. “As we work through the terms of the services agreement with Kroger in the coming months, we will be preparing the business for a transformative relationship which will reshape the food retailing industry in the U.S. in the years to come.”
The deal marked the fourth such agreement that Ocado has struck with supermarket operators worldwide in just six months. These include Sweden’s ICA, Canada’s Sobey’s and French supermarket operator Casino, according to CNBC.
The partnership also gives Kroger more leverage to compete as the grocery war continues to heat up. For example, Amazon is expanding its breadth in the grocery segment through its $13.7 billion purchase of Whole Foods Markets in August 2017.
On Wednesday, Target announced that it is rolling out its next-day delivery service of household essentials, Target Restock, nationwide. It’s also reducing the delivery cost, with the service now free for all Target REDcard holders, and $2.99 for all other orders (down from $4.99) — with no membership fee.
Walmart is also testing grocery delivery. The discounter’s goal is to offer the service across 800 stores by the end of the year, a move that will serve more than 40% of U.S. households. The program, which is currently available in six markets, will grow to serve more than 100 metro areas across the country.
Report: Amazon has visited all contenders for new HQ
Amazon is getting closer to naming the hosting city of its new corporate headquarters, dubbed HQ2.
The online giant visited all 20 finalist locations, a move that indicates the company is closing in on the site of its new headquarters, reported NBC News. There is no indication if list has been narrowed down, or if there is a leading contender, according to the report.
The final 20 contenders are Toronto, Canada; Columbus, Ohio; Indianapolis; Chicago; Denver; Nashville; Los Angeles; Dallas and Austin, Texas; Boston; New York City; Newark, New Jersey; Pittsburgh and Philadelphia; Montgomery County in Maryland; Washington, D.C.; Raleigh, North Carolina; Northern Virginia; Atlanta, and Miami, Florida.
The report noted that several cities in the top 20 have experienced an uptick in interest from other companies by just making it onto Amazon’s list.
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Walmart goes upscale online—in partnership with Lord & Taylor
Walmart is looking to appeal to upscale, fashion-minded customers with its new online initiative.
The discount giant, in partnership with Lord & Taylor, is launching a new online store on Walmart.com that will offer more than 125 brands sold by the department store retailer, ranging from Vince Camuto to Tommy Bahama to Miss Selfridge. The new section, which Walmart described as a “flagship store,” will be rolled out in stages during the coming weeks. It will be integrated within Walmart’s redesigned e-commerce site.
“As part of the Walmart.com redesign, and our commitment to establish Walmart.com as a destination for fashion, we recently relaunched our new fashion shopping experience,” said Denise Incandela, head of fashion, Walmart U.S. e-commerce. “The new experience is aligned with how customers shop the category, with editorial elements that inspire customers to browse and buy, and has already generated positive customer response. The next step is the launch of the Lord & Taylor flagship store, which introduces exciting new premium brands to our customers.”
The new online Lord & Taylor store will features clothing for men, women and children, accessories, and jewelry. Customers can shop by category, shop by brand, or draw inspiration from editorial stories, Walmart said. A header saying, “Premium Brands from Lord & Taylor,” will run across each premium brand page to distinguish the store from Walmart’s “everyday” section.
The partnership between the two retailers was announced last November. It comes as Hudson’s Bay Co. is working to turnaround the performance of its 50-store Lord & Taylor division.
“This innovative flagship on Walmart.com is an entirely new model for us and demonstrates the evolution of Lord & Taylor, and our commitment to advancing our digital presence,” said R.J. Cilley, senior VP of digital, Lord & Taylor. “We are excited for the opportunity to serve exponentially more customers with our premium fashion offerings, including our famous dress selection and many stylish brands.”
The Lord & Taylor online flagship also coincides with Walmart’s redesigned website, which features more personalization and specialty experiences. These range from a personalized home page, which showcases the top-selling items in a customer’s location, to specialty shopping experiences, such as Walmart’s digital home shopping experience, which streamlines how customers browse and purchase merchandise across the category.
For a look at the new Lord & Taylor online store, click here.