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Competition between grocers, Amazon intensifies

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NEW YORK — The battle for the future of the grocery business is under way as supermarket retailers invest in their digital capabilities and Amazon continues to roll out its brick-and-mortar food stores.

Kroger Co. executives said during the company’s recent virtual investors conference that the company intends to double its digital business by 2023.

“Today our digital sales are over $10 billion,” Kroger chairman and chief executive officer Rodney McMullen told analysts. “That is a massive shift from where we were just a few years ago. But there’s still a huge opportunity in front of us.”

McMullen described Kroger’s strategy as Leading With Fresh and Accelerating With Digital.

“By digital, we mean the Kroger seamless ecosystem we’ve built over the past few years to be able to deliver anything, anytime, anywhere regardless of channel, whether pickup, delivery or shipped,” he explained. “Today, we are seeing more and more new customers engaging in our seamless ecosystem. Since the pandemic, we have more than doubled our digital business in 2020. We will continue to build on this momentum. And we have a clear path to drive profitability. We have also been evolving our customer fulfillment network, leveraging our existing network of assets and strategic partnerships to meet heightened demand.”

Meanwhile, Albertsons Cos. has partnered with Google with the aim of offering an enhanced shopping experience for its customers.

“Albertsons Cos. is continuing to transform into a modern retailer fit for the future, and we are leading the industry forward by providing the easiest and most exciting shopping experience for our customers,” said Chris Rupp, executive vice president and chief customer and digital officer at Albertsons Cos. “In bringing together Google’s technology expertise with our commitment to customer-centric innovation, we’re providing our customers with a superior shopping experience no matter how they choose to shop with us.”

Albertsons Cos. and Google have been collaborating behind the scenes for the past year, and are working on a number of planned innovations that include shoppable maps with dynamic hyperlocal features, AI-powered conversational commerce and predictive grocery list building.

The companies also aim to make it even easier for customers to get groceries for pickup and delivery, by providing helpful information about online ordering from many Albertsons Cos.’ stores directly within mobile search. This functionality is coming to Google Maps later this year.

The partnership will build on projects that are already under way. For example, earlier this month, Albertsons Cos. announced its use of Business Messages to help people get up-to-date information about COVID-19 vaccines at Albertsons Cos. pharmacies.

The moves by Albertsons Cos. and Kroger come as Amazon is expanding its own chain of physical grocery stores.

Amazon recently confirmed plans to open four grocery stores on the East Coast.

Two of the stores will be located in the Washington, D.C., area — one in the district’s Logan Circle neighborhood and the other in Franconia, Va.

Another store will be located in Warrington, Pa., a suburb of Philadelphia, and the fourth will be in Chevy Chase, Md.

Amazon debuted its Amazon Fresh grocer format in September and recently opened its 11th in Bloomingdale, Ill. It reportedly has at least 28 other locations in the works.


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