Oxbotica raises $13.8M from Ocado to build autonomous vehicle tech for the online grocer’s logistics network

Ocado, the UK online grocer that has been making strides reselling its technology to other grocery companies to help them build and run their own online ordering-and-delivery operations, is making an investment today into what it believes will be the next stage of development of that business: the company is taking a £10 million ($13.8 million) stake in Oxbotica, a UK startup that develops autonomous driving systems.

Ocado is treating this as a strategic investment to develop autonomous systems that will work across its operations, from vehicles within and around its packing warehouses through to the last-mile vehicles that deliver grocery orders to people’s homes. It says it expects the first products to come out of this deal — likely in closed environments like warehouses rather than open streets — to be online in two years.

“We are excited about the opportunity to work with Oxbotica to develop a wide range of autonomous solutions that truly have the potential to transform both our and our partners’ CFC [customer fulfillment centers] and service delivery operations, while also giving all end customers the widest range of options and flexibility,” said Alex Harvey, chief of advanced technology at Ocado, in a statement.

The investment is coming as an extension to Oxbotica’s Series B that it announced in January, bringing the total size of the round — which was led by bp ventures, the investing arm of oil and gas giant bp, and also included BGF, safety equipment maker Halma, pension fund HostPlus, IP Group, Tencent, Venture Science and funds advised by Doxa Partners — to over $60 million.

The timing of the news is very interesting. It comes just one day (less than 24 hours in fact) after Walmart in the US took a stake in Cruise, another autonomous tech company, as part of recent $2.75B monster round. Walmart owns one of Ocado’s big competitors in the UK, ASDA; and Ocado recently made its first forays into the US, by way of its deal to power Kroger’s delivery. So it seems that competition between these two is heating up on the food front.

More generally, there has been a huge surge in the world of online grocery order and delivery services in the last year, with earlier movers like online-only Ocado, Tesco in the U.K. (which owns both physical stores and online networks), and Instacart in the U.S. seeing record demand, but also a lot of competition from well-capitalized newer entrants bringing different approaches (next-hour delivery, smaller baskets, specific products).

In Ocado’s home patch of Europe, they include Oda (formerly Kolonial), Rohlik out of the Czech Republic (which in March bagged $230 million in funding); Everli out of Italy (formerly called Supermercato24, it raised $100 million); Picnic out of the Netherlands (which has yet to announce any recent funding but it feels like it’s only a matter of time given it too has publicly laid out international ambitions). Even Ocado has raised huge amounts of money to pursue its own international ambitions. And that’s before you consider the nearly dozens of next-hour, smaller bag grocery delivery plays.

A lot of these players will have had a big year last year, not least because of the pandemic. Now, the big question will be how that market will look in the future as peoples go back to “normal” life.

That may well tighten the competitive landscape, and could be one reason why companies like Ocado are putting more money into working on what might be the next generation of services, one more efficient and run purely (or at least mostly) on technology.

Logistics account for some 10% of the total cost of a grocery delivery operation. But that figure goes up when there is peak demand or anything that disrupts regularly scheduled services.

My guess is also that with all of the subsidised services that are flying about right now where you see free deliveries or discounts on groceries to encourage new business — a result of the market getting so competitive — those logistics have bled into being an even bigger cost. So it’s no surprise to see the biggest players in this space looking at ways that it might leverage advances in technology to cut those costs and speed up how those operations work.

In addition to this collaboration with Oxbotica, Ocado continues to seek further investments and/or partnerships as it grows and develops its autonomous vehicle capabilities.

Notably, Oxbotica and Ocado are not strangers. They started to work together on a delivery pilot back in 2017. You can see a video of how that delivery service looks here:

 

“This is an excellent opportunity for Oxbotica and Ocado to strengthen our partnership, sharing our vision for the future of autonomy,” said Paul Newman, co-founder and CTO of Oxbotica, in a statement. “By combining both companies’ cutting-edge knowledge and resources, we hope to bring our Universal Autonomy vision to life and continue to solve some of the world’s most complex autonomy challenges.”

But as with all self-driving technology — incredibly complex and full of regulatory and safety hurdles — we are still fairly far from full commercial systems that actually remove people from the equation completely.

“For both regulatory and complexity reasons, Ocado expects that the development of vehicles that operate in low-speed urban areas or in restricted access areas, such as inside its CFC buildings or within its CFC yards, may become a reality sooner than fully-autonomous deliveries to consumers’ homes,” Ocado notes in its statement on the deal. “However, all aspects of autonomous vehicle development will be within the scope of this collaboration. Ocado expects to see the first prototypes of some early use cases for autonomous vehicles within two years.”

More to come.

#artificial-intelligence, #ecommerce, #europe, #food, #grocery, #grocery-delivery, #ocado, #oxbotica, #self-driving, #tc, #transportation

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Kroger launches its first Ocado-powered ‘shed’, a massive, robot-filled fulfillment center in Ohio

After inking a deal to work together almost three years ago, U.S. supermarket chain Kroger and U.K. online grocer Ocado today took the wraps off the first major product of that deal. Kroger has launched a new Ocado-powered customer fulfillment center in Monroe, Ohio, outside of Cincinnati, a gigantic warehouse covering 375,000 square feet and thousands of products for packing and delivering Kroger orders from online shoppers.

Built with a giant grid along the floor, “the shed”, as Ocado calls its warehouses, will feature some 1,000 robots alongside 400 human employees to pick, sort and move around items. It is expected to process as much as $700 million in sales annually, the sales of 20 brick-and-mortar stores.

Those orders, in turn, will be delivered in temperature-controlled Kroger Delivery vans, built on the model of Ocado’s vans in the US and able to store up to 20 orders. These will also be run using Ocado software, mapping algorithms to optimize deliveries along the fastest and most fuel-efficient routes.

The partnership was a long time in the making but the focus on what has come out of it is probably at its keenest right now, given the huge boost online shopping has had in the past year. The Covid-19 pandemic, and the resulting push for more social distancing, has driven a lot of people to the internet to shop, opting for deliveries over physical store visits for some or all of their food and other weekly essentials.

In call today with journalists, Rodney McMullen, Kroger’s chairman and CEO, said that delivery had grown 150% for Kroger last year. While some of that may well melt back into physical shopping as and when Covid-19 cases wane (fingers crossed), many in the industry believe that the genie has been let out of the bottle, so to speak: many consumers introduced to shopping online will stay, at least in part, and so this is about building infrastructure to meet that new demand.

(And there is some data that backs that up: Ocado CEO and co-founder Tim Steiner noted that at Ocado, pre-pandemic the average order value for the company was £105 ($144). That grew to £180 last year, and are at £120.)

Kroger, like many brick-and-mortar players, has been building out multiple fronts in its digital strategy. Alongside Ocado, the company has also been investing in technology to boost the efficiency of its in-store operations (for example by working with companies like Shelf Engine), and it has a grocery delivery partnership with Instacart.

That partnership with Instacart will remain in place, not least because it covers a much wider geography than the Ocado approach, which is live now in Cincinnati, and sounds like it will also expand to Florida. While Kroger today said that CFCs will vary in size and be built on the concept of “modules” (the Monroe facility is built on seven modules), this is still a capital intensive approach compared to the Instacart model, so might overall face a slower rollout and perhaps only make sense in Kroger’s denser markets.

“The two partnerships are critical to Kroger and our customers,” said Yael Cosset, Kroger’s CIO, in the call today. “We expect to work very closely in strategic partnership with Instacart and with Ocado.”

Ocado, an early player that started out in the UK back in 2000, is seen by many as the industry standard for how to build and run an online-only grocery business.

The company has been expanding its reach by way of taking the technology that it has built for itself and turning it into a product — a process that is still very much in development, with the company working now on robotic pickers and other autonomous systems, along with other technology to power and make its delivery service more efficient.

Ocado’s “AWS” strategy of turning tech that it has built for itself into a product to sell to others has born fruit: it now has partnerships to power online grocery services, and specifically fulfillment centers, in Japan (with Aeon), France (with Casino) and Canada (with Sobeys). That means the Kroger rollout is now a tested model, but it’s still a very notable move for the company to break into the U.S. while at the same time giving Kroger a much-needed bit of infrastructure to better compete with bigger players in the country like Walmart and Amazon.

In that regard, it will be interesting to see how and if Kroger leverages its much bigger Ocado-powered infrastructure for its other projects. The company is working with Mirakl to develop its own marketplace for third-party retailers, going head to head with similar offerings from — yes — Amazon and Walmart.

#ecommerce, #europe, #food, #grocery, #kroger, #ocado

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Norway’s Kolonial rebrands as Oda, bags $265M on a $900M valuation to grow its online grocery delivery business in Europe

Food delivery startups, and specifically those focused on grocery delivery, continue to reap super-sized rounds of funding in Europe, buoyed by a year of pandemic living that has led many consumers to shift to shopping online. Today, the latest of these is coming out of Norway.

Kolonial, a startup based out of Oslo that offers same-day or next-day delivery of food, meal kits and home essentials — its aim is to provide “a weekly shop” for prices that compete against those of traditional supermarkets — has raised €223 million ($265 million) in an equity round of funding. Along with that, the company — profitable as of last year — is rebranding to Oda and plans to use the money (and new name) to expand to more markets, starting first with Finland and then Germany in 2022.

The market for online grocery ordering and delivery is gearing up to be a very crowded one, with hundreds of millions of dollars being poured by investors into the fuel tanks of a range of startups — each originating out of different geographies, each with a slightly different approach. Oda believes it has the right mix to end up at the front of the pack.

“We have found ourselves in a unique position,” CEO and co-founder Karl Munthe-Kaas said in an interview with TechCrunch. “We have built a service targeting the mass market with instant deliveries and low prices, because if you want to capture the full basket for the family, you can’t be a premium service. We’ve done that, and we’re profitable.”

And now, it will have the backing of two e-commerce heavyweights for its next steps. SoftBank’s Vision Fund 2 and Prosus (the tech holdings of South Africa’s Naspers), are co-leading the round, with past backers Kinnevik and a strategic investor, Norwegian “soft discount” chain REMA, also participating.

Munthe-Kaas confirmed to TechCrunch in an interview that Oda is valued at €750 million ($900 million) post-money.

The funding is a big leap for Oda (the name is not officially going to come into effect until the end of this month, although the company is already describing itself with the new brand, so we’ll follow that lead). PitchBook data notes that before this round, Oda had only raised about $96 million, and its last valuation was estimated to be just $178 million in 2017.

The company has certainly come a long way. Founded in 2013 by ten friends, Kolonial originally seemed to have a more modest vision when it first started out: Kolonial in Norwegian doesn’t mean “colonial” (a connotation Munthe-Kaas nevertheless said the startup wanted to avoid, one big reason for the change), but “cornershop.” These days, Oda is focused more on competing against large supermarkets — its average order size is $120 — yet with a significantly more efficient cost base behind the scenes.

It’s also been helped by the current climate. Online grocery shopping has been growing and maturing for a while now, but the last year been a veritable hothouse in that process: Covid-19, shelter in place orders and a general desire for people to keep their distance all compelled many more consumers to try out online grocery shopping for the first time, and many have stuck with it.

“We have seen a significant inflection point with grocery over the last year with the market transitioning online, accelerated by Covid,” said Larry Illg, CEO of Prosus Food, in a statement. “Oda’s leadership and impressive growth in Norway paired with its ground-breaking technology and ambition to scale across Europe and beyond makes them an ideal partner to tackle the grocery opportunity over the coming years.”

Oda has over the years grown to become the sector leader in a category it arguably helped define in its home country. It was profitable last year on revenues of €200 million, and it currently controls some 70% of Norway’s online grocery ordering and delivery market based on its own particular approach to the model.

That model involves Oda building and controlling its own supply chains from producers to consumers (no partnerships with third y partphysical retailers), producing several of the products itself (such as baked goods) to order, and using centralized fulfillment centers to manage orders for large geographies.

“Centralized warehouses means 50 supermarkets in one location,” Munthe-Kaas said, adding that this also makes the business significantly greener, too.

Those fulfillment centers, meanwhile, are operated at “extreme efficiency”, in his words. Oda’s grocery item picking averages out at 212 units per hour — that is, the amount of items “picked” for orders in a week divided by the number of hours in a week. The next closest UPH number in the industry, Munthe-Kaas said, was Ocado in the UK at 170 UPH, and the norm, he added, was more like 100 UPH, with physical store picking (where customers select items from shelves themselves) averaging out at 70 UPH.

All of this translates to much more cost-effective operations, including more efficient ordering and stock rotation, which helps Oda make better margins on its sales overall. Munthe-Kaas declined to go into the details of how Oda manages to get such high UPH numbers — that’s competitive knowledge, he said — noting only that a lot of automation and data analytics goes into the process.

That will be music to the ears of SoftBank, which has had a complicated run in e-commerce in the last several years, backing a number of interesting juggernauts that have nonetheless found themselves unable to improve on challenging unit economics.

“Oda’s leading position in Norway is testament to the merits of its bespoke and data-driven approach in offering a personalised, holistic and reliable online grocery experience,” said Munish Varma, managing partner for SoftBank Investment Advisers, in a statement. “We believe that Oda’s customer-centric focus, market-leading automation technology and fulfillment efficiency are a winning combination, and position Oda for success in scaling internationally for the benefit of customers and suppliers alike.”   

The big challenge for Oda going forward will be whether it can transplant its business model as it has been developed for Norway into further markets.

Oda will not only be looking for customer traction for its own business, but it will be doing so potentially against heavy competition from others also looking to expand outside their borders.

There are other online supermarket plays like Rohlik out of the Czech Republic (which in March bagged $230 million in funding); Everli out of Italy (formerly called Supermercato24, it also raised $100 million); Picnic out of the Netherlands (which has yet to announce any recent funding but it feels like it’s only a matter of time given it too has publicly laid out international ambitions); and Ocado in the UK (which also has raised huge amounts of money to pursue its own international ambitions).

And there is also the wave of companies that are building more fleet-of-foot approaches around smaller inventories and much faster turnaround times, the idea being that this can cater both to individuals and a different way of shopping — smaller and more often — even if you are a family.

Among these so-called “q-commerce” (quick commerce) players, covering just some of the most recent funding rounds, Glovo just last week raised $528 million; Gorillas in Berlin raised $290 million; Turkey’s Getir — also rapidly expanding across Europe — picked up $300 million on a $2.6 billion valuation as Sequoia took its first bite into the European food market; and reportedly Zapp in London has also closed $100 million in funding.

Deliveroo, which went public last week, is also now delivering groceries (in partnership with Sainsbury’s) alongside its restaurant delivery service.

These, ironically, are more cornershop replacements than Oda itself (formerly called Kolonia, or “cornershop” in Norwegian), and Munthe-Kaas said he sees them as “complementary” to what Oda does.

Indeed, Munthe-Kaas remains very committed to the basic rulebook that Oda has lived by for years.

“You need to beat the physical stores on quality, selection and price and get it home delivered,” he said. “This is a margin business and the only way to optimize is to be completely relentless.”

But he also understands that this might ultimately need to be modified depending on the market. For example, while the company has not worked with other retailers in Norway — even the investment by REMA is not for distribution but for better economies of scale in procuring products that REMA and Oda will sell independently from each other — this might be a route that Oda chooses to take in other markets.

“We’re in discussions with several other retailers, wholesalers and producers,” he said. “It’s important to get sourcing terms and have upstream logistics, but there are many ways of achieving that. We are super open to making partnerships on that front, but we still think the way to win is to run the value chain.”

#ecommerce, #europe, #food, #funding, #grocery, #grocery-delivery, #online-grocery, #prosus, #softbank

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Target grocery pickup service expands nationwide

Target announced today its grocery pickup service is available nationwide, First introduced earlier this summer in the Midwest, Target said it would soon roll out grocery pickup services across the U.S., reaching 1,500 stores in a matter of months. Today, Target says it has reached that goal, which equates to nearly 85% of its locations.

Though the retailer had already offered grocery delivery through Shipt and both online Order Pickup and a same-day curbside service called Drive Up, it hadn’t yet offered the ability to pick up groceries due to issues with storing cold foods. But store remodels and more recent expansions to the pickup area inside some Target stores addressed the problem.

To move forward with its plans, the retailer had to work around issues related to the coronavirus outbreak that had delayed Target’s plans to fully remodel hundreds of stores. In stores that hadn’t yet been remodeled, a small construction project allowed the order pickup area to accommodate temperature-controlled storage.

The new grocery pickup service doesn’t offer all of Target’s fresh and frozen items at launch. Instead, Target has made available the most popular 750 fresh and frozen items on top of thousands of non-perishables that were already available to order. These newly added items include produce, dairy, bakery, meat and frozen products. The company said it imposed the limitation based on how it saw customers were using grocery pickup services to shop for essentials between larger trips to the store. It’s unclear, however, if that will remain true in the coronavirus era, when shoppers are now visiting stores less frequently, but stocking up in greater quantities when they do.

In both Target and Walmart’s earnings, announced this week, the retailers reported basket size increases related to this trend. Target, for example, reported customer basket size grew 18.8% in Q2 as people shopped for more items on their Target runs.

If this trend continues beyond the pandemic, retailers may need consider making online order pickup equivalent to shopping inside the store, in terms of product selection.

In addition to fresh and frozen groceries, Target shoppers can also pick from the over 250,000 general merchandise items available for pickup across categories like home, apparel, essentials, and more within their same grocery order. Shoppers don’t have to create separate “carts” in the Target app, nor does the Target website or app separate grocery shopping from other online shopping the way Walmart.com and its app do.

However, the option to build a “Drive Up” order is only available within the mobile app, as before. From the web, you can only create a order you pick up inside the store or choose delivery.

Target is ahead of schedule with its grocery pickup expansions. Originally, the retailer said it would reach 1,500 stores by the U.S. holiday season. The company didn’t offer a timeframe for when it expects to offer grocery pickup at every store.

Online grocery helped fuel both Target and Walmart’s quarterly sales, both retailers reported this week. In Target’s case, same-day services accounted for a majority of its digital growth, with growth of 273% across all services. Curbside pickup grew 734% while Shipt grocery delivery grew 350% during the quarter.

 

#e-commerce, #ecommerce, #grocery, #target

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Pandemic helped drive Walmart e-commerce sales up 97% in second quarter

Walmart’s investments in e-commerce, including online grocery delivery and pickup, are continuing to pay off for the retailer. In the company’s Q2 earnings, released this morning, Walmart reported its U.S. e-commerce sales were up 97% — an increase attributed to more customers shopping online during the pandemic, stocking up on household supplies, and shopping for grocery items online.

Today, Walmart offers grocery pickup at 3,450 locations and same-day delivery at 2,730 stores. Since February, it has expanded time slots by 30% to help meet consumer demand.

Overall, the company also benefited in the quarter from the impact of U.S. consumers’ government stimulus checks. As those stimulus funds ran out, sales began to normalize. But Walmart’s July comparable sales still grew by more than 4%, the company noted.

Walmart’s online marketplace also got a boost from the larger e-commerce bump, with sales up by a triple-digit percentage.

In addition, Walmart’s U.S. same-store sales were up 9.3% in the retailer’s fiscal second quarter, led by strength in general merchandise and food. Walmart President and CEO, Doug McMillon, also noted the retailer saw strong sales in categories like TVs, computing devices, and connected home — sales that also have ties to the pandemic which is forcing people to spend more time at home. He also said some consumers continued to stockpile items in coronavirus hotspots, like cleaning supplies, which were still often out-of-stock. Both cleaning supplies and paper goods (e.g., TP and paper towels) led Walmart’s consumable sales in the quarter.

The overall rise in grocery orders, meanwhile, can be partially attributed to the pandemic’s impacts and not just the ease of shopping for grocery items online. As more people have been cooking meals at home instead of dining out at restaurants, their grocery orders have also increased. Walmart said both grocery pickup and delivery saw “all-time high sales volumes” in the quarter.

The pandemic has been changing how consumers shop, too, the company pointed out. Instead of regular trips to the store, consumers now shop less frequently but buy more during each trip. Combined with the shift to e-commerce, that led to a 27% increase in comparable average ticket sizes in the quarter, while comparable transactions dropped 14%.

On the earnings call, McMillon briefly confirmed Walmart’s plans to introduce a membership service, as had been previously reported. The company is said to be working on its own alternative to Amazon Prime, dubbed Walmart+. But the launch has been repeatedly delayed, Vox recently reported. According to the CEO, Walmart has been testing the delivery component to the membership service since last year with its “Delivery Unlimited” program, which McMillon referred to as “a great base of an offer” for a broader membership program.

Today, Delivery Unlimited subscribers pay either $12.95 per month or $98 per year to order groceries online from Walmart.com without a per-order fee. Walmart+, however, will reportedly include other perks, like gas discounts and special product deals. McMillon didn’t speak to the specifics of its service, saying instead that Walmart will have more to offer when it’s ready to talk about it.

Overall, Walmart beat on earnings in the quarter, with revenue of $137.74 billion, topping estimates of $135.48 billion. Earnings per share came in at $1.56 adjusted, versus the expected $1.25. Net income also rose year-over-year to $6.48 billion, or $2.27 per share, up from $3.61 billion, or $1.26.

#ecommerce, #grocery, #online-grocery, #pandemic, #shopping, #walmart

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DST Global pumps $35 million into Asian e-grocer Weee!

Coronavirus stay-home orders have sparked an unprecedented demand for grocery delivery around the world. Now investors are clamoring to bet on promising players in the field.

That includes DST Global, the investment firm helmed by Israeli-Russian billionaire Yuri Milner. Most recently, it poured $35 million into Weee!, a California-based startup that delivers Asian groceries like fresh kimchi and Japanese desserts from its own warehouses to major cities across the U.S. The funding boosted the five-year-old startup’s total raise since launch to over $100 million.

Weee! declined to share its post-money valuation, but the figure likely surpasses $500 million given it’s widely known that DST Global does not generally back companies whose valuation is under $500 million.

Online grocery is a capital-intensive business with thin profit margins, so it’s unsurprising to see many contenders — in both China and the U.S. — operating in the red. Against the odds, Weee! turned profitable earlier this year and went cash-flow positive.

That means the startup was in no rush to fundraise, probably giving it more bargaining power in negotiating terms with a storied investor like DST Global, whose portfolio spans Spotify, Twitter, Airbnb, Slack, Didi, Gojek, just to name a few.

Weee! certainly matches DST Global’s investment target as a high-growth startup. In June, the company recorded 700% year-over-year growth in revenue and was on course to generate revenue in the lower hundreds of millions of dollars in 2020, it told TechCrunch at the time.

Since the U.S. begins winding down lockdowns and people return to supermarkets, some grocery delivery services have seen their revenue growth slow. Weee!, however, is currently growing 15-20% more than its March peak. Liu explained the sustained boom stems from the service’s product differentiation: Asian specialties that one can’t even find in Chinatowns.

“People don’t want to pay extra if [an online grocery] only provides convenient delivery but no product differentiation,” said Han Shen, founding partner of iFly.vc, a California-based fund that backed Weee! in its Series A round.

In addition, Weee! tries to streamline every step of its operations, from product procurement, warehouse management, staff allocation, through to door-to-door delivery. The result is zero food waste thanks to fast inventory turnover.

“There is no secret tactic that we can’t talk about, nothing more than achieving efficiency throughout the entire process,” Shen observed.

In the meantime, Weee! works to keep prices down by cultivating direct relationships with suppliers like local farms and opting for next-day delivery rather than the more costly 30-minute standard expected in China, where he grew up. Earlier this year, former chief operations officer of Netflix Tom Dillon joined the board to help beef up Weee!’s operational efficiency.

With the new proceeds, the Asian e-grocer hopes to hire new talents and expand its delivery service from eight key regions to 13-14 cities across the U.S. by the end of this year.

#asia, #dst-global, #e-grocer, #ecommerce, #food, #grocery, #online-grocery, #tc, #weee

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US online grocery sales hit record $7.2 billion in June

Despite the slow reopening of the U.S. economy over the past several weeks, online grocery shopping is continuing to reach ever-higher numbers as Americans seem to be in no rush to return to the store. According to new research released today by Brick Meets Click and Mercatus, U.S. online grocery sales hit a record $7.2 billion in June, up 9% over May, as 45.6 million households turned to online grocery pickup and delivery services for a larger portion of their grocery needs.

This figure is higher than the $4 billion seen in March 2020, when the U.S. first went under coronavirus lockdowns. Since then, online grocery sales have been growing quickly — jumping to $5.3 billion in April, then $6.6 billion in May, as more consumers shifted their shopping to online services, grocery included.

The customer base for online grocery also grew from 39.5 million monthly actives in March to now 45.6 million as of June, the report found.

Remarkably, only 16.1 million customers were using online grocery as of August 2019, totalling then just $1.2 million in sales.

The growth isn’t just due to a large influx of new customers to online grocery, but also due to more frequent orders. Customers may be ordering from online services not only for their large “stocking up” trips, but also for those smaller grocery runs they would often do in between — to grab ingredients for their weekly recipes or to replace the more quickly depleted items, like milk, bread and other staples, perhaps.

According to the new research, order frequency ticked up from 1.7 orders per month for active households in May to 1.9 orders in June, demonstrating this increase.

In addition, more retailers, including independents, have added capacity for online order fulfillment amid the coronavirus pandemic to meet consumers’ changing needs. This has also resulted in an increase in sales as more customers are able to shop online and get a timeslot for delivery or pickup.

Walmart Grocery in April even began pilot testing a way to offer 2-hour “Express” grocery delivery service to customers who were willing to pay an upcharge. The company said this was a direct result of its newly added capacity aimed at serving its online grocery customer base. Instacart, meanwhile, added new features in April aimed at opening more delivery windows. And many retailers — including Amazon, Walmart, Instacart, and Shipt, among others — have been hiring to help address the growing number of online orders.

When asked about their increased usage of online grocery in June, consumers reported fears of contracting coronavirus as their main concern, the report said. Specifically, 44% of households claimed they had “high levels” of concern about someone in their home being infected, up 2 percentage points from the prior month. This increase was also almost entirely driven by the 9% increase among shoppers in the over-60 age segment.

But on the downside, the increased choice in online grocery providers has made it more difficult for services to attract repeat usage, the data indicates. As of June, the likelihood of a shopper to use a specific online grocery service again within the next 30 days now sits at 57%. While this figure did grow by 1 percentage point since May, it’s still far below the pre-COVID 74% repeat rate seen back in August 2019. 

General interest in online grocery was also growing. Among both active online grocery shoppers and those not active, 32% said they were either “extremely” or “very likely” to use a service in the next 90 days — up 2 percentage points from May. The interest, not surprisingly, was strongest in households which had used a online grocery service in June, with 57% showing strong interest, compared with only 17% of the non-active households.

The data for the research was sourced from 1,781 U.S. adults in June (6/24-6/25), with responses weighted by age to reflect the national population of U.S. adults. The firms’ prior surveys also used a similar methodology, timing and sampling.

“Even though some retailers have seen sales decline within their respective business, the new reality of increased capacity across the market – and related greater choice (or options) for shoppers – means that all grocery retailers will need to accelerate their efforts to make shopping online even more seamless to thrive going forward,” said David Bishop, partner and research lead, Brick Meets Click, in a statement.

#e-commerce, #ecommerce, #grocery, #online-grocery, #shopping

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Target is rolling out fresh grocery pickup nationwide, starting with the Midwest

Target today is joining the growing number of grocery retailers offering curbside and in-store pickup services for fresh and frozen items. The retailer had paused its plans to rollout grocery pickup this spring, citing the COVID-19 pandemic as a factor. It said it didn’t have time to train employees on the new processes. Today, those plans are back in motion. The company now says it expects to have fresh and frozen grocery pickup available across 1,500 stores in the U.S. within a matter of months.

The addition isn’t being powered by Target’s grocery delivery service, Shipt, but will instead utilize store staff to pick and bag items — much as they do today for Target’s existing Order Pickup and Drive Up services.

However, consumers won’t have access to all of Target’s fresh and frozen food items at launch. The pickup services will offer 750 fresh and frozen items on top of the thousands of non-perishables already available. This includes produce, dairy, bakery, meat and frozen products.

In the same order, shoppers can also order from the more than 250,000 items available for pickup across categories like home, apparel, essentials and more.

A company spokesperson tells us the decision to limit fresh and frozen product selection to 750 items was related to how the service was used in early tests. The company found that Target shoppers largely used pickup to shop for grocery essentials in between larger trips to the store.

Both Drive Up and Order Pickup will offer the same product selection, we understand.

Target says the fresh and frozen items will be stored in temperature-controlled storage in the pickup area in the front of the store, until the customer arrives for their pickup.

The service is free to use and doesn’t require an order minimum or membership. In addition, Target RedCard holders and Target Circle members will be able to utilize their discounts on the new grocery items, as well.

Target is currently rolling out fresh and frozen grocery in the Midwest region, following its successful tests of grocery pickup in the Twin Cities and Kansas City markets. This will make the service available to 400 stores. It expects to reach 1,500 stores by the U.S holiday season.

The retailer is one of many grocers to now offer pickup services in the U.S. For Walmart, online grocery has played a large role in its growing e-commerce sales. In the fourth quarter of its fiscal 2019, ahead of the pandemic, Walmart’s e-commerce sales grew by 35%. As the coronavirus outbreak drove more shoppers to buy online and pickup outside of Walmart sales, the retailer reported a 74% jump in e-commerce sales in Q1.

Target, meanwhile, reported in Q1 its same-day services were growing in popularity as well, due to the pandemic. It even saw days where its volume of order pickup was twice as high as Cyber Monday. And on the Friday before Easter, it did more volume via Shipt’s delivery service than it did in a typical week.

Also in Q1, Target’s digital sales overall grew 141% while its combination of same-day services (Shipt, Drive Up, and Order Pickup) grew 278%. Of the millions of shoppers using Drive Up, 40% were new to the service — an indication of how the pandemic has shifted consumer behavior.

But Q1 was not all good news for the retailer. It said it was spending more on labor, selling fewer high-margin items, and writing down apparel and other goods that weren’t selling due to the pandemic’s influence on shopper’s needs. The company promised that its investments in online shopping options and its workforce — last week, for example, it raised its minimum wage to $15 per hour — would pay off in the long run.

“The speed and convenience of our fulfillment options are unmatched across the country, and they’ve become even more critical for our guests searching for easy and safe ways to shop during the pandemic. By adding fresh grocery to the pickup services our guests already love, we’re giving them even more reasons to shop at Target, said Target’s chief operating officer, John Mulligan, in a statement. “During a time when even more people are looking for different ways to get the items they need, we’ll continue to invest in making Target the easiest and safest place to shop,” he added.

 

#ecommerce, #grocery, #target

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Amazon expands use of SNAP benefits for online grocery to 11 more states

Amazon customers in nearly a dozen more U.S. states are now able to use their SNAP (Supplemental Nutrition Assistance Program) benefits to purchase groceries online, the retailer announced on Thursday. The news represents a significant expansion of a United States Department of Agriculture (USDA) pilot program introduced in 2019 that aimed to open up online grocery shopping to those on public assistance. This program is even more critical now, as in-store shopping puts consumers at risk of contracting the deadly novel coronavirus. 

To date, participating retailers in the USDA pilot program have included Walmart, Amazon, ShopRite, and other smaller chains.

Amazon confirmed to TechCrunch that the 11 new states that now support using SNAP for online grocery, include those that were added starting last week through today, Thursday, May 28.

The initial expansion of the pilot added New Mexico, Vermont, West Virginia, and Wisconsin, which all became active last week. On Tuesday of this week, Colorado, Maryland, Minnesota, and New Jersey rolled out. And today, Massachusetts, Michigan, and Virginia were added as well.

With these new additions, Amazon customers on public assistance can shop online for groceries across a total of 25 U.S. states plus Washington D.C. At checkout, they can pay for groceries using their SNAP EBT.

Including the new states, Amazon now offers the use of SNAP EBT for online grocery in Alabama, Arizona, California, Colorado, Florida, Idaho, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Oregon, Texas, Vermont, Virginia, Washington, West Virginia, and Wisconsin.

However, Amazon is not the only retailer offering online grocery for SNAP EBT customers in these 25 states.

According to the USDA’s website, SNAP users can now order their groceries online through either Amazon or Walmart in these markets.

The site also indicates that Amazon is the only retailer supporting the District of Columbia at present. In addition, ShopRite supports the use of SNAP for online groceries in Maryland, New Jersey, and New York. And Wright’s Markets is participating in the pilot program in Alabama.

The USDA’s website indicates several more states are now in the planning phase so they can add online purchasing as a shopping option soon. These include Connecticut, Georgia, Illinois, Indiana, Nevada, Ohio, Oklahoma, Pennsylvania, Rhode Island, Tennessee, and Wyoming.

As part of Amazon’s participation in the USDA program, it not only enabled the use of SNAP EBT as a payment method, it also made its Amazon Fresh service available to SNAP recipients in states where Fresh is available without requiring a Prime membership. And it offered free shipping on both Amazon Fresh and Amazon Pantry orders.

At launch, Amazon had said the USDA pilot program would “dramatically increase access to food for more remote customers.”

However, in the coronavirus era, access to online grocery can be a life-saving measure for some.

The pandemic has complicated access to food for those on SNAP benefits, and for high-risk individuals on SNAP in particular. These consumers now have to risk getting COVID-19 every time they out for groceries themselves. And as more workers become unemployed due to the economic impacts from the pandemic, more people are joining public assistance programs like SNAP. 

In light of the pandemic, the USDA said it would fast-track any state that wanted to join the pilot. California, Arizona, Florida, Idaho, Kentucky, Missouri, Texas, West Virginia, D.C., North Carolina, and Vermont, were just approved in April, for example. In May, the USDA approved Minnesota, Colorado, Nevada, Wisconsin, Rhode Island, New Mexico, and Wyoming.

In under 6 weeks, the USDA has expanded access to the program to a total of 36 states plus D.C., it say, though many are not yet live. When they launch, however, online purchasing for groceries will be available to more than 90% of SNAP participants, the USDA has noted.

 

#amazon, #coronavirus, #covid-19, #e-commerce, #ebt, #ecommerce, #grocery, #online-grocery, #online-shopping, #public-assistance, #shopping

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Walmart is piloting a pricier 2-hour ‘Express’ grocery delivery service

Record usage of grocery delivery services amid the COVID-19 pandemic has led to delayed orders, fewer open delivery windows, and an inability to even book a delivery time slot, on occasion. Walmart now hopes to capitalize on the increased demand for speedier delivery with the introduction of a new service that allows consumers to pay to get to the front of the line. The retailer confirmed today it’s launching a new Walmart Grocery service called “Express” which promises orders in 2 hours or less for an upcharge of $10 on top of the usual delivery fee.

The service has been in pilot testing across 100 Walmart stores in the U.S. since mid-April. Walmart says it plans to expand the service to nearly 1,000 stores in early May and it will be offered in a total of nearly 2,000 stores in the weeks after.

Some Walmart customers may have recently received a push notification alerting them to the launch.

To use Express delivery, you first fill your online Walmart Grocery cart with the $30 minimum required for delivery orders or more. The Express service offers over 160,000 items from across Walmart’s grocery, consumables, and general merchandise categories. At checkout, you’ll see an option beneath the calendar where you pick a delivery date to select the Express service. In many cases, there may no other standard delivery time slots available for the current day or even several days out, which makes the Express service even more appealing to shoppers who need their orders sooner.

Though Walmart is officially promoting Express as a “two-hour” delivery service, in the weeks it’s been piloting the program Walmart has been able to deliver these orders within 56 minutes, on average.

In our tests, we were shown an Express fee of $18.90 to receive a delivery in “55 mins or less,” the app informed us today, April 30. There were no other fees. Without choosing the Express option, the next available time slot was not until next week, on Monday, May 4.

A price of $18.90 is close to — but is not exactly — a $10 increase over Walmart’s typical delivery fees of $7.95 or $9.95, depending on time of day. But we understand the plan is to make Express a flat $10 upcharge moving forward. (Walmart hadn’t been planning to officially announce the launch until next week, so pricing is being updated.)

Like Walmart’s other grocery deliveries, Express deliveries are handled by Walmart’s external network of delivery partners, which vary by market. The retailer won’t comment on if those additional fees are split with their partners, or how, if so.

There could be backlash against a system like this, given how it favors a wealthier customer at a time when food and other critical supplies have run short. During the pandemic, store shelves have often been bare as consumers hoarded things like toilet paper, hand sanitizer, and Lysol cleaners. Now, consumers are being warned that meat shortages are expected soon.

In addition, the pandemic has already exposed the income divide between those who can afford to shop online and low-income customers, who can only use their SNAP benefits (food stamps) in physical stores — except in a handful of states where a USDA pilot has been running. And now those with the means will be able to gain another advantage: paying to get to the limited supplies first.

Walmart says it’s doing things to mitigate these types of concerns, however.

For items where the inventory is so limited it can’t guarantee delivery, it’s removing their availability from the online grocery service. Plus, the retailer says it’s not pushing back standard delivery orders to accommodate the high-paying Express customers. Instead, the Express service is being made available on top of Walmart’s existing grocery pickup and delivery capacity.

The Express service wasn’t dreamed up because of the pandemic, Walmart says, but it did play a role in terms of the timing of the launch.

“The demand that we’ve seen during the coronavirus pandemic is making us push forward and expedite the development of some services that we may have been thinking about,” a Walmart spokesperson explained. “But demand has pushed us to innovate more quickly,” they added.

Walmart is not alone in experiencing a crush of online grocery orders due to the COVID-19 pandemic.

The company and others have seen a record number of downloads for their grocery apps in recent weeks. In fact, demand for online grocery as well as other e-commerce orders has been so great that Walmart hired 150,000 new workers out of a pool of over a million applicants a full six weeks ahead of schedule, and is now hiring 50,000 more.

Meanwhile, Walmart’s online grocery rivals — Shipt, Instacart and Amazon — have also been hiring hundreds of thousands of new shoppers between them. Amazon had to implement a waitlist system for new Amazon Fresh and Whole Foods Market pickup and delivery customers due to the rise in online grocery shopping. And Instacart made several adjustments to its app to help better prioritize orders and open up more delivery windows.

In Walmart’s case, its ability to launch Express isn’t solely due to its new hires, we’re told.

The company already employs a workforce of 74,000 “personal shoppers” who dedicate themselves to pulling for online grocery orders. Walmart says Express is powered by these personal shoppers, only some of which may be the newly hired store associates.

“We have an opportunity to serve our customers no matter what life calls for,” said Tom Ward, Walmart senior vice president, Customer Product. “Whether it be a last-minute ingredient, medicine when a fever hits, or the item you didn’t know you needed when checking off your chore list, time matters. Express is a solve for that,” he said.

Updated 4/30/20, 6:35 PM ET with additional expansion details and exec quote. 

#e-commerce, #ecommerce, #grocery, #grocery-delivery, #online-retail, #online-shopping, #retail, #walmart

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Nextdoor and Walmart partner on a new neighborly assistance program

Neighborhood social network Nextdoor and Walmart are teaming up today to launch a new “Neighbors Helping Neighbors” program that will make it easier for vulnerable community members to get assistance from neighbors who are already planning a trip to Walmart. The new in-app feature will allow Nextdoor users to post to groups associated with their local Walmart store to request shopping assistance.

To find the new option, Nextdoor users can either use the Nextdoor website or mobile app.

From there, users will click on the “Groups” tab where they’ll see local Walmart stores pinned to the top of the page. Members can then post a message to the group feed where they can ask for help or offer to help others.

Members who connect in the feed can then work out the details on the message board or through direct message, where they can share more private details like their address and what they need from the store.

The feature is designed to help elderly, high-risk or other vulnerable members find someone who will pick up groceries, medications, or other essentials when they’re planning a trip to the store.

This could also offer a low-cost alternative to using online grocery delivery services, which require tipping. In the case of a neighbor helping a neighbor, the assistance is offered on a volunteer basis, not as someone’s job. That could be potentially life-saving for low-income community members who can’t risk shopping in a store during the coronavirus pandemic, but who also struggle to afford alternatives like online grocery.

Walmart isn’t moderating or managing these Nextdoor groups, to be clear, but worked with Nextdoor to make the feature available.

For the retailer, the addition isn’t just beneficial in terms of directing customers to Walmart to shop, it’s also seen as a way to reduce the number of people who come to the store in-person.

“I’ve seen first-hand the countless ways our Walmart team is working together during this challenging time, leading with humanity, compassion and understanding to serve our customers,” said Janey Whiteside, Walmart’s Chief Customer Officer, in a statement about the feature’s launch. “We’re continuing to do that through our new program with Nextdoor. We’re connecting neighbors to each other so that more members of our communities have access to essential items, while limiting contact and the number of people shopping in our stores,” she added.

Nextdoor has launched several new features in response to the coronavirus pandemic in recent weeks.

Its new “Help Maps” allowed members to post and offer help in their neighborhood, for example. But this feature had been buried on the “More” menu in the app and was being underutilized as a result. A dedicated place within Nextdoor Groups for these sorts of requests is more visible, making it easier to offer assistance or to ask for help.

Over the past few weeks, Nextdoor says it’s seen a 7x increase in people joining groups to help one another, a not surprising figure given its recent exit from beta.

Nextdoor will also make the Walmart groups easy to find by pinning them to the top of the Groups tab, it says.

Meanwhile, Walmart store locations and hours where “Neighbors Helping Neighbors” is available can be found on Nextdoor’s “Help Map.”

“We’re inspired everyday by the kindness of people around the world who are stepping up and helping out. In recent weeks, we’ve been blown away by the number of members who have raised their hand to run an errand, go to the grocery store, or pick up a prescription for a neighbor,” said Sarah Friar, Nextdoor CEO, about the feature. “We’re grateful for Walmart’s partnership to make this important connection between neighbors around vital services, and we’re proud to come together to ensure everyone has a neighborhood to rely on,” she said.

The new initiative is launching nationwide starting today, but may not be immediately available in the app as the rollout could take time to complete.

#apps, #coronavirus, #grocery, #mobile, #neighbors, #nextdoor, #social, #social-media, #volunteer, #walmart

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