Nielsen reported recently that Amazon's e-commerce lead is shrinking as major brick-and-mortar retailers like Target, Walmart and Kroger - along with e-grocery company Instacart - have outpaced Amazon in percentage growth of online consumer packaged good (CPG) purchases.
In the two-year period beginning in January 2017, the number of e-commerce buyers of grocery and other CPG products for Amazon rose 29%. However, the growth for Instacart (256%), Walmart (207%), Kroger (172%) and Target (122%) was far greater.
According to Nielsen, Amazon competitors gained ground in the last couple years by rapidly ramping up their online grocery fulfillment capabilities for home delivery and for store pickup.
Despite big gains by competitors, Amazon still enjoys a healthy lead. Its reach among U.S. online purchasers is approximately ten times more than any other retailer.
Showing posts with label e-commerce. Show all posts
Showing posts with label e-commerce. Show all posts
Monday, May 6, 2019
Friday, August 24, 2018
Kroger partners with China e-commerce giant Alibaba
Kroger announced last week that it plans to test sales of its Simple Truth natural and organic brand through Alibaba, China's largest e-commerce retailer. The move will give Alibaba's 500+ million Chinese consumers access to Kroger's Simple Truth brand.
Kroger pointed out that the partnership supports its strategic plan to redefine the grocery customer experience by growing its private brand program, creating customer value and driving top-line growth via alternative revenue streams.
The Alibaba deal also means that Kroger is following Walmart and Amazon, who have significantly boosted their e-commerce presence in lucrative foreign markets.
Kroger pointed out that the partnership supports its strategic plan to redefine the grocery customer experience by growing its private brand program, creating customer value and driving top-line growth via alternative revenue streams.
The Alibaba deal also means that Kroger is following Walmart and Amazon, who have significantly boosted their e-commerce presence in lucrative foreign markets.
Wednesday, March 7, 2018
Target ramping up CapEx, small-format stores, e-commerce efforts
Target announced earlier this week that it plans to spend about $3.5 billion on capital expenditures in 2018 (compared to $2.5 billion last year) as it accelerates investments in store remodels, small-store formats and other initiatives.
The company also reported that the investments will likely have an adverse affect on profit margins. Target execs said that they expect to generate a lower operating margin in the near term as they continue to increase wages and upgrade its stores and supply chain to better accommodate its growing e-commerce business.
Regarding Target's e-commerce efforts, the company unveiled free two-day shipping on hundreds of thousands of items and plans to offer same-day delivery through Shipt, which it acquired last year, in most major markets by the end of this year.
Shipt is currently available to deliver from 455 Target stores. Target said Shipt also plans to continue to expand its partnerships with other retailers, including Costco, Publix and others.
Following up on the "nearly 30" small-format stores opened in 2017, Target said it plans to open about 30 more in 2018 and another 30 in 2019.
The company also reported that the investments will likely have an adverse affect on profit margins. Target execs said that they expect to generate a lower operating margin in the near term as they continue to increase wages and upgrade its stores and supply chain to better accommodate its growing e-commerce business.
Regarding Target's e-commerce efforts, the company unveiled free two-day shipping on hundreds of thousands of items and plans to offer same-day delivery through Shipt, which it acquired last year, in most major markets by the end of this year.
Shipt is currently available to deliver from 455 Target stores. Target said Shipt also plans to continue to expand its partnerships with other retailers, including Costco, Publix and others.
Following up on the "nearly 30" small-format stores opened in 2017, Target said it plans to open about 30 more in 2018 and another 30 in 2019.
Monday, January 22, 2018
Walmart to increase hourly wages, expand parental benefits, close 63 Sam's Club stores
Walmart said earlier this month that it plans to increase its starting wage for all hourly workers in the U.S. to $11 per hour , pay a one-time bonus of up to $1,000 to select employees, and expand benefits for parental leave.
The increased starting rate is scheduled to become effective in February for all Walmart, Sam's Club, supply chain, e-commerce and home office hourly workers. The bonuses, which will range from $200 to $1,000, are for workers who don't benefit from the hourly salary increase.
Walmart President and CEO Doug McMillon said in a blog post that the company is in the "early stages of assessing the opportunities tax reform creates for us to invest in our consumers and associates to further strengthen our business, all of which should benefit our shareholders."
Karen Short, an analyst at Barclays Capital, estimated that tax reform could generate about $4.3 billion in cash flow for Walmart. With the salary hike and increased benefits costing about $700 million plus the incremental cost for expanded parental leave and adoption benefits, Short thinks that about $3 billion per year will be available for the company to invest in lower prices, technology and shareholder returns.
In related news, Walmart said the company plans to close 63 Sam's Club warehouse stores in the next several weeks, with about 10 of the locations to be converted to e-commerce fulfillment centers.
The increased starting rate is scheduled to become effective in February for all Walmart, Sam's Club, supply chain, e-commerce and home office hourly workers. The bonuses, which will range from $200 to $1,000, are for workers who don't benefit from the hourly salary increase.
Walmart President and CEO Doug McMillon said in a blog post that the company is in the "early stages of assessing the opportunities tax reform creates for us to invest in our consumers and associates to further strengthen our business, all of which should benefit our shareholders."
Karen Short, an analyst at Barclays Capital, estimated that tax reform could generate about $4.3 billion in cash flow for Walmart. With the salary hike and increased benefits costing about $700 million plus the incremental cost for expanded parental leave and adoption benefits, Short thinks that about $3 billion per year will be available for the company to invest in lower prices, technology and shareholder returns.
In related news, Walmart said the company plans to close 63 Sam's Club warehouse stores in the next several weeks, with about 10 of the locations to be converted to e-commerce fulfillment centers.
Monday, August 21, 2017
Walmart e-commerce grows by 60% in Q2
Walmart announced last week that e-commerce sales in the U.S. grew by 60% in its fiscal second quarter, as compared to the same quarter a year ago.
"We continue to be really happy with the online grocery program," said Investor Relations VP Steve Schmitt. "It really is a differentiated offering that we know our customers love... We also continued to expand the assortment that they can order utilizing online grocery."
Walmart also announced that sales, comps and store traffic in the U.S. all increased in the quarter. U.S. sales for the quarter totaled $78.7 billion, and overall sales were $123 billion.
The company is about one-third of the way into a multiyear plan to invest billions in lower prices.
"We continue to be really happy with the online grocery program," said Investor Relations VP Steve Schmitt. "It really is a differentiated offering that we know our customers love... We also continued to expand the assortment that they can order utilizing online grocery."
Walmart also announced that sales, comps and store traffic in the U.S. all increased in the quarter. U.S. sales for the quarter totaled $78.7 billion, and overall sales were $123 billion.
The company is about one-third of the way into a multiyear plan to invest billions in lower prices.
Wednesday, August 16, 2017
Report predicts that traditional supermarkets will decline rapidly
A report released by Inmar predicts that nearly one in four traditional grocery stores won't be around in five years. Inmar is an analytics and technology-enabled service provider in the retail space.
The report concludes that dollar share for traditional supermarkets will continue to decline through 2021, while fresh, limited assortment and warehouse stores will gain in dollar share and store count over the same period. In addition, food e-commerce is projected to grow at a rapid pace.
According to the report, store counts will decrease over the next five years by nearly 25% from about 25,000 to 19,000, while dollar share for traditional supermarkets will decrease from 36.5% to 33.7%.
The drug store is the only other significant channel projected to see a decrease in dollar share (-0.6%).
Inmar predicts that e-commerce food sales will more than double by 2021, from $33 billion, or 4% of the current food and beverage market, to $70 billion, or 8% of the projected market.
Limited assortment stores like Aldi, Trader Joe's and Save-A-Lot will grow by more than 21% or nearly 1,000 stores over the next five years, while their dollar share increases from 3.1% to 4.4%, according to the report.
The report concludes that dollar share for traditional supermarkets will continue to decline through 2021, while fresh, limited assortment and warehouse stores will gain in dollar share and store count over the same period. In addition, food e-commerce is projected to grow at a rapid pace.
According to the report, store counts will decrease over the next five years by nearly 25% from about 25,000 to 19,000, while dollar share for traditional supermarkets will decrease from 36.5% to 33.7%.
The drug store is the only other significant channel projected to see a decrease in dollar share (-0.6%).
Inmar predicts that e-commerce food sales will more than double by 2021, from $33 billion, or 4% of the current food and beverage market, to $70 billion, or 8% of the projected market.
Limited assortment stores like Aldi, Trader Joe's and Save-A-Lot will grow by more than 21% or nearly 1,000 stores over the next five years, while their dollar share increases from 3.1% to 4.4%, according to the report.
Friday, July 7, 2017
The retail sector remains strong despite media reports
I read an interesting article on Forbes.com that sets out to dispel the myth that retail is struggling. Although it's not purely grocery-related, I thought I would share it. Below are the six "fast facts" cited by the article, as well as a link to the story for more info on each one.
1. National retail rents reached a nine-year high in Q1.
2. Major retail brands are still expanding.
3. U.S. retailers are leasing the pack in international expansion.
4. Brick-and-mortar is taking over e-commerce, not vice versa.
5. Warren Buffet just bet big on the sector.
6. Fundamentals reflect continued strength in the sector.
Here's the story: 6 fast facts about retail that dispel the myth that the sector is struggling
1. National retail rents reached a nine-year high in Q1.
2. Major retail brands are still expanding.
3. U.S. retailers are leasing the pack in international expansion.
4. Brick-and-mortar is taking over e-commerce, not vice versa.
5. Warren Buffet just bet big on the sector.
6. Fundamentals reflect continued strength in the sector.
Here's the story: 6 fast facts about retail that dispel the myth that the sector is struggling
Wednesday, March 15, 2017
Target investing in pricing, e-commerce, small format stores
Target announced that it plans to shift away from promotional pricing and back to every day low pricing as part of a $1 billion investment this year. The change in pricing is part of the company's overall strategy to enhance the in-store experience and leverage its stores as fulfillment centers for online orders.
CEO Brian Cornell said the investments in pricing will be spread throughout the store, but will begin with food, personal care and household essentials, "the trip-driving items our guests depend on every day," he said.
Target has been testing its food offerings at prototype stores in California and Texas, including transitions to daily delivery of produce.
In addition to Target's price investments, the company plans to remodel stores and open about 100 small-format stores in the next three years. The TargetExpress banner will be found mostly in urban markets, densely populated suburbs and college campuses. Currently there are 32 TargetExpress stores, all of which are highly tailored to suit the needs of the individual neighborhoods, the company said.
According to a story in Supermarket News, the small-format stores are part of Target's e-commerce strategy. Company executives reported that physical stores played a key role in fulfillment during the past holiday season, with 80% of online orders being picked up at stores.
These changes come in the wake of a sharp decline in profit in 2016. Net income fell 18.6% for the year, with sales down 5.8% to $69.5 billion.
CEO Brian Cornell said the investments in pricing will be spread throughout the store, but will begin with food, personal care and household essentials, "the trip-driving items our guests depend on every day," he said.
Target has been testing its food offerings at prototype stores in California and Texas, including transitions to daily delivery of produce.
In addition to Target's price investments, the company plans to remodel stores and open about 100 small-format stores in the next three years. The TargetExpress banner will be found mostly in urban markets, densely populated suburbs and college campuses. Currently there are 32 TargetExpress stores, all of which are highly tailored to suit the needs of the individual neighborhoods, the company said.
According to a story in Supermarket News, the small-format stores are part of Target's e-commerce strategy. Company executives reported that physical stores played a key role in fulfillment during the past holiday season, with 80% of online orders being picked up at stores.
These changes come in the wake of a sharp decline in profit in 2016. Net income fell 18.6% for the year, with sales down 5.8% to $69.5 billion.
Tuesday, September 27, 2016
Albertsons banners - including Acme - to expand e-commerce
On the heels of a recent analyst report recommending that food retailers slow their e-commerce efforts, MyWebGrocer announced that several Albertsons banners - including Acme - plan to add "click-and-collect" and delivery service on its platform. Albertsons has used MyWebGrocer's software since 2012 for online shopping lists and circulars.
A report released earlier this month by Tabs Analytics reported that just 4.5% of all shoppers are using the Internet to buy groceries six or more times per year, and concluded that "consumers have turned their backs on buying groceries online."
Related story: Study concludes that food retailers should focus on families, not e-commerce or millennials
A report released earlier this month by Tabs Analytics reported that just 4.5% of all shoppers are using the Internet to buy groceries six or more times per year, and concluded that "consumers have turned their backs on buying groceries online."
Related story: Study concludes that food retailers should focus on families, not e-commerce or millennials
Study concludes that food retailers should focus on families, not e-commerce or millennials
A study on food and beverage buying released earlier this month by Tabs Analytics concluded that food retailers should slow their investments in e-commerce and on millennials, and focus instead on old-fashioned promotional spending at stores and on marketing to households with children.
The study included 1,000 geographically and demographically dispersed consumers between 18 and 75, and analyzed 15 consumables categories.
According to the study, only 20% of millennials are heavy buyers of food and consumables, and only 4.5% of all shoppers use the Internet to purchase groceries six or more times per year.
"The study underscores that online grocery is failing," said Tabs CEO Kurt Jetta. "For the fourth year in a row, consumers have turned their backs on buying groceries online no matter how much online grocery retailers try to entice them."
In addition, since the study showed that millennials use grocery store circulars significantly less than the overall study average (30% compared to 42%), Jetta said retailers should focus their marketing on households with children, as they are heavy buyers of food and beverages, and much more likely to respond to promotions.
The study included 1,000 geographically and demographically dispersed consumers between 18 and 75, and analyzed 15 consumables categories.
According to the study, only 20% of millennials are heavy buyers of food and consumables, and only 4.5% of all shoppers use the Internet to purchase groceries six or more times per year.
"The study underscores that online grocery is failing," said Tabs CEO Kurt Jetta. "For the fourth year in a row, consumers have turned their backs on buying groceries online no matter how much online grocery retailers try to entice them."
In addition, since the study showed that millennials use grocery store circulars significantly less than the overall study average (30% compared to 42%), Jetta said retailers should focus their marketing on households with children, as they are heavy buyers of food and beverages, and much more likely to respond to promotions.
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