The Meijer grocery chain announced recently that it has expanded the test of its new online/store concept called Grocery Express into the Chicago area (coverage here and here). The concept is pretty straightforward-the customer logs onto the Meijer website, picks out the items she needs and schedules a convenient pick up time for the order. Armed with the customer order, Meijer “personal shoppers” grab all the items and package them up for pick up by the customer in a designated parking lot pick up zone. The customer pays an extra $6.95 fee for the privilege of zipping into the parking lot to pick up the goods.
Webvan put a fork in the online CPG industry for several years, but innovation is starting to percolate again in this market. For example, delivery services like Amazon Fresh are expanding, and CPG manufacturers like P&G have been making some noise about eCommerce lately. (Our company Alice.com is certainly making a run for the mainstream CPG consumer as well).
It makes sense for a traditional retailer like Meijer to leverage its existing store infrastructure to deliver an online/offline hybrid offer. So much sense that I suspect many traditional retailers will jump on this bandwagon if the concept shows promise. But the key question becomes whether this will attract the mainstream consumer. Our research at Alice.com shows that shipping fees have been a huge barrier to online CPG. Will consumers view this $6.95 fee in the same fashion? Another high profile launch of the “order online/pick-up” model, Sears MyGopher, hasn’t faired too well.
Time will tell whether Meijer will be more successful, but we’d love to hear your views. Is the Grocery Express concept a winner for CPG eCommerce?