October 7, 2008
Meijer Sells Groceries By the Case Online
Meijer is looking to use it website to make life just a little bit easier and more affordable for its shoppers, and the company has rolled out a new online service to make its point.
Meijer’s Grocery By The Case program gives the chain’s shoppers the opportunity to buy from 2,000 shelf-stable grocery items in bulk. The retailer has said that consumers purchasing goods from the program will save at least five percent compared to if they bought the item individually. To sweeten the deal and encourage bulk buys, Meijer is offering free delivery on purchases of $150 and up. Orders will be delivered within seven days of purchase.
“Grocery has always been the cornerstone of the Meijer business, so it’s a logical evolution for us offer grocery items to our online shoppers,” said Rob Fleener, vice president of marketing and e-commerce for Meijer, in a press release. “This is another example of our efforts to help Meijer customers save time and money.”
Grocery By The Case will have its own section on the Meijer website and follows previous moves by the chain to create a competitive point of difference online. Meijer began testing a personal-shopper program where consumers order products online and then go to a store for pickup.
Discussion Questions: Will consumers be drawn to Meijer’s Grocery By The Case service? What competitors/channels have the most to be concerned about with Meijer’s new service? Will we see other grocers follow Meijer’s lead?
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Very innovative, aggressive and customer-centric. Here’s the key: Meijer needs to make sure the customer experience works on a true “buy anywhere; fulfill anywhere” level. It’s a cross-channel program and customers need to see it as such.
It’s obviously meant to combat clubs and certain other supercenters. It all depends on how big a price break customers are getting for bulk buying. Economic circumstances are such that more people are buying what they need to cut weekly and monthly expenses. Getting them to part with more money for a single purchase is going to be a challenge.
It could be a good move as long as the company is not devoting additional storage space or people to the effort. But I wouldn’t bet the farm on it.
It’ll be fairly low volume, but it’s definitely a positive differentiator and will likely keep shoppers a little more loyal while making a little money for Meijer. It might help keep shoppers from straying to Walmart and the clubs. It’d be nice if they included more SKUs if this works for them. Including high-turn SKUs has obvious benefits, but putting some of the low-turns on this list might keep some folk particularly happy. For example, I have such a hard time finding Boca Chili in rural Vermont that every time I see it on a shelf somewhere, I buy out the store.
Other grocers have tried this in the past and it never really seemed to catch on. Sam’s Club and Costco probably have a better business model that competes with this idea. Right now, I can’t think of any company in the Midwest that sells groceries online and it improved their bottom line.
Just surfed the Meijer site and I have to say, so far it is the best online grocery site I have seen. Very customer friendly and easy to use. Free shipping over $150 is a great promo and I suspect getting to a $150 basket shopping by the case is not hard. Perhaps customer will be more respondent to shopping online by the case? I don’t want to jinx it but online groceries don’t exactly have the most profitable track record or survival rate. Staying away from fresh produce and meat is a good idea as I think that was the stumbling block for other ventures. Excellent execution on the website and customer experience as well.
Online grocery has been an extremely hard business to make money at and the high cost of gas has made it even more of a challenge. It will be interesting to see if this twist on the formula does better. Larger, less frequent deliveries of non-perishable grocery items should go a long way toward reducing these costs. The seven day time window also allows them to schedule the deliveries in a much more efficient manner. Looks like a smart move.
Wow, in the vein of “what goes around comes around”….
I just hung up the phone with a couple in their late eighties. They have often regaled us with stories of life in the depression and WWII. One of the stories always involves Bert’s mother ordering their canned goods from Macy’s. Seems the catalog would come out during the “spring pack” (in the days before our winter vegetables were sourced from South America) and his mom would place the family’s order for the year. Macy’s delivered to the home of course, free of charge.
So, is this just another instance of home delivery fronted by an online ordering system instead of a catalog? Or a leading economic indicator? Ouch.
Selling dry groceries by the case online is a good move. It provides an alternative to shopping the club format. Since for the normal household, club shopping equates to pantry loading, why not do it online with free delivery? It saves time and fuel cost, which is important to most club format shoppers. This is a trend we can expect to see more of.
This is a great move by Meijer. Meijer has done a great job of differentiating itself from its competitors. This offering isn’t one that requires a large investment on Meijer’s part and could pay off very well in improving their ability to compete against the club stores.
Meijer’s Products by the Case program is another initiative to provide value to their customers. The research tells us that shoppers are making fewer trips and that stock-up trips are becoming more important. Checking the list online against items available at the local store saves time and energy. Consumers are pooling their time and pantry lists to take advantage of club store offers–Meijer is offering this selection without the need for membership and free delivery on high volume orders.
Value has never been more important to consumers, and providing programs and service that meets shopper needs is key in the days ahead.
I’ll bet my buddy Ben Ball remembers the “Can-Can” sales from days gone by, in which we offered mix-and-match case-quantity discounts (pet food was included). In the era when canned goods ruled center store, these were huge promotions. Now Meijer has put a different spin on Can-Can, and those who really understand the chain couldn’t be less surprised. It’s thoroughly Meijer.
As a consultant to this fine chain HQd in Grand Rapids, MI, I was forcibly immersed into their culture from the first day of my first winter visit there. I was greeted at the airport by my contact, Bill Smith (yes, that was his name and he was revered at Meijer), who handed me a snowsuit, goggles, and boots. We drove directly from the airport to my first experience on a snowmobile. I changed out of my business suit and into the snowsuit beside the car, got a five-minute snowmobile tutorial, and we were off! Oh, and it was nighttime and we were in a heavily-wooded area. There I was following Bill on his snowmobile while driving my own with only our headlights to illuminate potential hazards. I gamely followed Bill’s taillights and whoops of joy, and added a few whoops of my own. Lucky I wasn’t killed. Lucky, also, that I was given that experience. Totally Meijer.
Meijer’s culture was forged in rural Michigan by hardy, tough, self-reliant folk serving customers just like themselves. How many supermarket chains do you know that cater to hunters by featuring all of the supplies they need? Yes, canned goods, but also Coleman products and ammunition. It’s one of the biggest seasons of the year for Meijer stores located in hunting areas. Hunters stock up at Meijer on their way to the lakes and reserves depending on the season.
Meijer’s strength is in knowing what their customers need. Lots of chains claim this distinction, but few deliver (please excuse the pun). Our economic crisis has impacted Michigan and the surrounding states into which Meijer has expanded more severely than other areas, and winter is on the way. Stock up and save gas. Quintessentially Meijer. Will other chains follow suit? Perhaps, but certainly with less success. Meijer’s is a unique culture serving a unique customer base.
In today’s economy, this approach is likely to have a good result. Dry groceries that are commonly consumed on a regular basis may be something that consumers will buy in bulk. Some consumers will not be able to buy in bulk and will continue to shop for lowest prices at the time they are shopping.
At the time of my comment every person voting had answered one of the top two positive responses, and I think that’s the first time I’ve ever seen that, once the pool has been open a few hours.
This should give Meijer confidence that they’ve made the right decision.
In my city we’ve had a company, Mr. Case, using exactly this model for about 20 years. They still take almost 100% of their order over the phone AND charge a premium for their goods. Their is a three case minimum, but no dollar value, to receive free delivery. Their mostly wealthy clients are happy to have a voice on the phone and a smiling face with their delivery.
It occurs to me that this move may simply be a move to increase the dollar ring on delivery orders. The Meijer geography is not a population dense geography and delivery has to be terribly inefficient. I see no singular benefit from this move. Those who are case shoppers are going to Sam’s and Costco. And they are saving considerably more money.
There will always be the Boca Chili example as Warren pointed out, but that is not enough to run a business on.
With the dramatic increase in spend by consumers on goods and services over the Web, it is not surprising that Meijer is focusing some effort to leverage that trend. Combined with a sour economy that is seeing consumers seeking out value/lower cost at every turn and it is certainly worth trying.
Multi-channel delivery options has been seen as a great way to grow a business but it is also quickly becoming a defensive strategy to ensure business isn’t lost to competitors who have alternative delivery offerings. Better to cannibalize one channel with another and keep the customer then see them go to a competitor. Despite some that point to the failure of previous grocers’ “online shopping programs,” the timing, technology, and attitude of the consumer is ever-changing and demands innovation. To me, Grocery By The Case reflects Meijer’s understanding of their customer.
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Very innovative, aggressive and customer-centric. Here’s the key: Meijer needs to make sure the customer experience works on a true “buy anywhere; fulfill anywhere” level. It’s a cross-channel program and customers need to see it as such.
It’s obviously meant to combat clubs and certain other supercenters. It all depends on how big a price break customers are getting for bulk buying. Economic circumstances are such that more people are buying what they need to cut weekly and monthly expenses. Getting them to part with more money for a single purchase is going to be a challenge.
It could be a good move as long as the company is not devoting additional storage space or people to the effort. But I wouldn’t bet the farm on it.
It’ll be fairly low volume, but it’s definitely a positive differentiator and will likely keep shoppers a little more loyal while making a little money for Meijer. It might help keep shoppers from straying to Walmart and the clubs. It’d be nice if they included more SKUs if this works for them. Including high-turn SKUs has obvious benefits, but putting some of the low-turns on this list might keep some folk particularly happy. For example, I have such a hard time finding Boca Chili in rural Vermont that every time I see it on a shelf somewhere, I buy out the store.
Other grocers have tried this in the past and it never really seemed to catch on. Sam’s Club and Costco probably have a better business model that competes with this idea. Right now, I can’t think of any company in the Midwest that sells groceries online and it improved their bottom line.
Just surfed the Meijer site and I have to say, so far it is the best online grocery site I have seen. Very customer friendly and easy to use. Free shipping over $150 is a great promo and I suspect getting to a $150 basket shopping by the case is not hard. Perhaps customer will be more respondent to shopping online by the case? I don’t want to jinx it but online groceries don’t exactly have the most profitable track record or survival rate. Staying away from fresh produce and meat is a good idea as I think that was the stumbling block for other ventures. Excellent execution on the website and customer experience as well.
Online grocery has been an extremely hard business to make money at and the high cost of gas has made it even more of a challenge. It will be interesting to see if this twist on the formula does better. Larger, less frequent deliveries of non-perishable grocery items should go a long way toward reducing these costs. The seven day time window also allows them to schedule the deliveries in a much more efficient manner. Looks like a smart move.
Wow, in the vein of “what goes around comes around”….
I just hung up the phone with a couple in their late eighties. They have often regaled us with stories of life in the depression and WWII. One of the stories always involves Bert’s mother ordering their canned goods from Macy’s. Seems the catalog would come out during the “spring pack” (in the days before our winter vegetables were sourced from South America) and his mom would place the family’s order for the year. Macy’s delivered to the home of course, free of charge.
So, is this just another instance of home delivery fronted by an online ordering system instead of a catalog? Or a leading economic indicator? Ouch.
Selling dry groceries by the case online is a good move. It provides an alternative to shopping the club format. Since for the normal household, club shopping equates to pantry loading, why not do it online with free delivery? It saves time and fuel cost, which is important to most club format shoppers. This is a trend we can expect to see more of.
This is a great move by Meijer. Meijer has done a great job of differentiating itself from its competitors. This offering isn’t one that requires a large investment on Meijer’s part and could pay off very well in improving their ability to compete against the club stores.
Meijer’s Products by the Case program is another initiative to provide value to their customers. The research tells us that shoppers are making fewer trips and that stock-up trips are becoming more important. Checking the list online against items available at the local store saves time and energy. Consumers are pooling their time and pantry lists to take advantage of club store offers–Meijer is offering this selection without the need for membership and free delivery on high volume orders.
Value has never been more important to consumers, and providing programs and service that meets shopper needs is key in the days ahead.
I’ll bet my buddy Ben Ball remembers the “Can-Can” sales from days gone by, in which we offered mix-and-match case-quantity discounts (pet food was included). In the era when canned goods ruled center store, these were huge promotions. Now Meijer has put a different spin on Can-Can, and those who really understand the chain couldn’t be less surprised. It’s thoroughly Meijer.
As a consultant to this fine chain HQd in Grand Rapids, MI, I was forcibly immersed into their culture from the first day of my first winter visit there. I was greeted at the airport by my contact, Bill Smith (yes, that was his name and he was revered at Meijer), who handed me a snowsuit, goggles, and boots. We drove directly from the airport to my first experience on a snowmobile. I changed out of my business suit and into the snowsuit beside the car, got a five-minute snowmobile tutorial, and we were off! Oh, and it was nighttime and we were in a heavily-wooded area. There I was following Bill on his snowmobile while driving my own with only our headlights to illuminate potential hazards. I gamely followed Bill’s taillights and whoops of joy, and added a few whoops of my own. Lucky I wasn’t killed. Lucky, also, that I was given that experience. Totally Meijer.
Meijer’s culture was forged in rural Michigan by hardy, tough, self-reliant folk serving customers just like themselves. How many supermarket chains do you know that cater to hunters by featuring all of the supplies they need? Yes, canned goods, but also Coleman products and ammunition. It’s one of the biggest seasons of the year for Meijer stores located in hunting areas. Hunters stock up at Meijer on their way to the lakes and reserves depending on the season.
Meijer’s strength is in knowing what their customers need. Lots of chains claim this distinction, but few deliver (please excuse the pun). Our economic crisis has impacted Michigan and the surrounding states into which Meijer has expanded more severely than other areas, and winter is on the way. Stock up and save gas. Quintessentially Meijer. Will other chains follow suit? Perhaps, but certainly with less success. Meijer’s is a unique culture serving a unique customer base.
In today’s economy, this approach is likely to have a good result. Dry groceries that are commonly consumed on a regular basis may be something that consumers will buy in bulk. Some consumers will not be able to buy in bulk and will continue to shop for lowest prices at the time they are shopping.
At the time of my comment every person voting had answered one of the top two positive responses, and I think that’s the first time I’ve ever seen that, once the pool has been open a few hours.
This should give Meijer confidence that they’ve made the right decision.
In my city we’ve had a company, Mr. Case, using exactly this model for about 20 years. They still take almost 100% of their order over the phone AND charge a premium for their goods. Their is a three case minimum, but no dollar value, to receive free delivery. Their mostly wealthy clients are happy to have a voice on the phone and a smiling face with their delivery.
It occurs to me that this move may simply be a move to increase the dollar ring on delivery orders. The Meijer geography is not a population dense geography and delivery has to be terribly inefficient. I see no singular benefit from this move. Those who are case shoppers are going to Sam’s and Costco. And they are saving considerably more money.
There will always be the Boca Chili example as Warren pointed out, but that is not enough to run a business on.
With the dramatic increase in spend by consumers on goods and services over the Web, it is not surprising that Meijer is focusing some effort to leverage that trend. Combined with a sour economy that is seeing consumers seeking out value/lower cost at every turn and it is certainly worth trying.
Multi-channel delivery options has been seen as a great way to grow a business but it is also quickly becoming a defensive strategy to ensure business isn’t lost to competitors who have alternative delivery offerings. Better to cannibalize one channel with another and keep the customer then see them go to a competitor. Despite some that point to the failure of previous grocers’ “online shopping programs,” the timing, technology, and attitude of the consumer is ever-changing and demands innovation. To me, Grocery By The Case reflects Meijer’s understanding of their customer.