COVER STORY
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especially the larger ones, have had difficulty in growing their top lines during the past four years. In fact, revenue peaked in 2013.” This likely means that large grocery chains will need to compete against new forces, like Amazon-Whole Foods, by relying on the knowledge and skills of internal staff, which may not include comprehensive knowledge and skills bases for competing in online environments or for adapting business processes to multichannel engagement with consumers. “The real issue here is not ‘bricks and clicks,’ but ‘bricks and cliques,’” says Tompkins. “Amazon, an e-commerce presence, now buys Whole Foods so it can give its clique of buyers ‘bricks.’ But if you’re a traditional grocery store chain and must now compete with a large online presence with for-
midable warehousing and logistics capabilities, you might be asking yourself how you will be able to compete with that mode…In China, Ali Baba grocery stores enable you to choose your fresh lobster, which they will cook for you in the store while you shop. Models like this are what traditional grocers are competing against. Ninety percent of these stores look like they did 35 years ago, and now they find that in addition to adapting to a multichannel approach, they must cut prices as well. It’s a difficult challenge.”
Keys to a Successful Transformation Although the road to multichannel grocery shopping may be difficult, large grocery chains still have their brands, their followings and the good will they have cultivated through the years. It’s a foundation that can be built upon. “The key is to know who you are and to do it really well,” says Tomp-
kins. “Some grocers focus on shiny apples in well-appointed displays. Others want to show a farm-toshelf approach, with the dirt still on the apples. Grocers need to be asking themselves these questions about identity. Do you want a coffee shop in the store? Do you want to have private label goods? Do you want to offer in-store samples of food? What are the demographics of the customers that you are targeting to serve?” At the same time, retail grocers need to assess their own ability to deliver on an e-commerce order, and truthfully evaluate how they can best deliver the goods. “A fundamental question that retail grocers need to be asking themselves is whether they have a website and/or app
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