July 11, 2007
Publix Brings Deli Orders Out to Customers
Pretty much everything Publix does is news in the grocery industry. The reason for that is straightforward: Publix is willing to test concepts others are not; it measures what it tests and it makes decisions to rollout or move on to something else based on performance.
The latest concept Publix is putting to the test is curbside delivery of phone orders placed at a store in Fort Myers, Fla.
Shannon Patten, a spokesperson for Publix, told The Ledger, “For customers who are time-starved it’s a way for them to consider us as an option for lunch or dinner.”
The new curbside service Publix is testing is similar in concept to that offered by a growing number of restaurant chains. Outback Steakhouse, for example, offers curbside pickup at all its restaurants and that portion of the business now accounts for 12 percent of the chain’s total sales.
According to NPD Group, more than half of all restaurant meals in 2006 were takeout orders. The average American placed 127 orders to go in 2006 while sitting down to only 81 meals inside restaurants.
“Publix has always been a supermarket laboratory,” David Livingston, principal with DJL Consulting and a member of the RetailWire BrainTrust, told The Ledger. “Whether or not these will be successful, I don’t know. But this shows they’re being innovative and experimental. I have to admire them for that.”
Discussion Question: What do you think of the potential for curbside pickup of foodservice orders in grocery stores? What is your reaction to Publix testing the concept?
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Consumers will love the curbside grocery service. However, as a brand-marketer, I’m not so much in love with the concept because it takes away the likelihood of unplanned sales, which are needed in the consumer packaged goods business to be the difference between breaking even, and profitability.
This is not a money maker. Publix will not gain more margins because of curbside delivery. Most people don’t want to wait for the service, which is why curbside service is no longer a big draw for other companies in the food service industry. The key here is for Publix to focus on those items that draw more customers, keep them happy with excellent service and generate both increased revenues and profits.
Once again, Publix is willing to take some chances and they should be applauded. Yet the story is bigger than Publix delivering deli items curbside. As we continue to hear about supermarket retailers who are struggling to maintain their point of difference. both Publix and Safeway seem to be “getting it.” Safeway opens a restaurant away from a Safeway store, and Publix offers sandwiches at curbside. They are beginning to realize that they are more than a supermarket, they are a food delivery system.
Why should Subway own the sandwich business when supermarkets have the same ingredients, and can produce the same product? Why should Papa John’s own the pizza delivery business? Can’t a “supermarket” perform the same service, with the same or better product?
The sooner that supermarkets understand that they are more than a building that carries products, and are a provider of a food experience, whatever that experience might be, the more successful the supermarket company will be.
What is ironic is that this is heralded as “innovative” when restaurants have been doing this for years. The argument that this may take from in-store sales and impulse purchasing denies the fact that the target market is not going to go inside the supermarket on this trip anyway. They are looking for a dinner-to-go and if the supermarket is not going to offer this option then the choice will be Outback or Applebee’s.
Now that Publix is doing this I see more supermarkets providing such a service. The problem with the supermarket industry is that most operators want to be “first at being second.” Publix is successful because they seem to want to be “first at being first.”
Right now I have the Applebee’s phone number on my speed dial and I phone in a dinner now and then. Their curbside service isn’t too busy but it is used. I can see the same at Publix. If I use the Publix curbside service should I tip the employee that brings out the food? I’m not used to tipping grocery employees.
Once again, Publix market tests and researches a business opportunity with its great marketing skills of: a) listening to its shoppers,and b) market segmentation by micro marketing to the appropriate target audience.
Publix is probably the MAD MARKETING guru of the grocery industry! Hmmmmmmmm
I also admire Publix for their ability and flexibility to try new concepts and offerings. The concept of almost “drive though” shopping is a great convenience factor for a meal time solution. I think along the lines of Chinese food or pizza where I like the producer of the food, but want to go home and consume it while I enjoy the family or TV. If I can call ahead to my supermarket (where I make many more visits than my local restaurant) why not have them prepare my dinner as well?
The secret will be if they can emulate the Ukrop’s model of having their customers be aware of the offerings, the high quality and the convenience of the other trips they make to the store.
Publix’s curbside pickup for deli orders will definitely raise sales. The only question is whether the additional sales will more than pay for the additional costs involved. Deli counters can have high product margins, but they’re labor intensive. And it’s critical to schedule to staff flexibly, since customers who want fresh sandwiches tend to come in mealtime waves.
Curbside pickup is a customer service coup for Publix and yet again they have differentiated themselves from the competition by providing additional services. The downside is that Publix may see a hit in the impulse sales that are generated as customers walk the store. Although I have seen many retailers increase sales by merely adding new services as the psychological impact of the added convenience drives additional customers to the store.
Such experimentation is refreshing and should be emulated by others in the industry.
I think this concept could be very successful if implemented via an online ordering service — online grocery shopping, delivered to door-side, along with dinner! This will save tons of time for people who only want to spend 2 minutes at the store, and if the website is well designed, can still generate impulse buys.
In an era when everyone knows everything, it is hard for retailers to really differentiate themselves. Companies like Publix, which continuously innovate for the customers’ interest, create an image of a ‘customer first’ retailer. Whether or not these experiments become successful is a different matter but they do go a long way in creating a favorable image of the retailer in the minds of its customers.
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Consumers will love the curbside grocery service. However, as a brand-marketer, I’m not so much in love with the concept because it takes away the likelihood of unplanned sales, which are needed in the consumer packaged goods business to be the difference between breaking even, and profitability.
This is not a money maker. Publix will not gain more margins because of curbside delivery. Most people don’t want to wait for the service, which is why curbside service is no longer a big draw for other companies in the food service industry. The key here is for Publix to focus on those items that draw more customers, keep them happy with excellent service and generate both increased revenues and profits.
Once again, Publix is willing to take some chances and they should be applauded. Yet the story is bigger than Publix delivering deli items curbside. As we continue to hear about supermarket retailers who are struggling to maintain their point of difference. both Publix and Safeway seem to be “getting it.” Safeway opens a restaurant away from a Safeway store, and Publix offers sandwiches at curbside. They are beginning to realize that they are more than a supermarket, they are a food delivery system.
Why should Subway own the sandwich business when supermarkets have the same ingredients, and can produce the same product? Why should Papa John’s own the pizza delivery business? Can’t a “supermarket” perform the same service, with the same or better product?
The sooner that supermarkets understand that they are more than a building that carries products, and are a provider of a food experience, whatever that experience might be, the more successful the supermarket company will be.
What is ironic is that this is heralded as “innovative” when restaurants have been doing this for years. The argument that this may take from in-store sales and impulse purchasing denies the fact that the target market is not going to go inside the supermarket on this trip anyway. They are looking for a dinner-to-go and if the supermarket is not going to offer this option then the choice will be Outback or Applebee’s.
Now that Publix is doing this I see more supermarkets providing such a service. The problem with the supermarket industry is that most operators want to be “first at being second.” Publix is successful because they seem to want to be “first at being first.”
Right now I have the Applebee’s phone number on my speed dial and I phone in a dinner now and then. Their curbside service isn’t too busy but it is used. I can see the same at Publix. If I use the Publix curbside service should I tip the employee that brings out the food? I’m not used to tipping grocery employees.
Once again, Publix market tests and researches a business opportunity with its great marketing skills of: a) listening to its shoppers,and b) market segmentation by micro marketing to the appropriate target audience.
Publix is probably the MAD MARKETING guru of the grocery industry! Hmmmmmmmm
I also admire Publix for their ability and flexibility to try new concepts and offerings. The concept of almost “drive though” shopping is a great convenience factor for a meal time solution. I think along the lines of Chinese food or pizza where I like the producer of the food, but want to go home and consume it while I enjoy the family or TV. If I can call ahead to my supermarket (where I make many more visits than my local restaurant) why not have them prepare my dinner as well?
The secret will be if they can emulate the Ukrop’s model of having their customers be aware of the offerings, the high quality and the convenience of the other trips they make to the store.
Publix’s curbside pickup for deli orders will definitely raise sales. The only question is whether the additional sales will more than pay for the additional costs involved. Deli counters can have high product margins, but they’re labor intensive. And it’s critical to schedule to staff flexibly, since customers who want fresh sandwiches tend to come in mealtime waves.
Curbside pickup is a customer service coup for Publix and yet again they have differentiated themselves from the competition by providing additional services. The downside is that Publix may see a hit in the impulse sales that are generated as customers walk the store. Although I have seen many retailers increase sales by merely adding new services as the psychological impact of the added convenience drives additional customers to the store.
Such experimentation is refreshing and should be emulated by others in the industry.
I think this concept could be very successful if implemented via an online ordering service — online grocery shopping, delivered to door-side, along with dinner! This will save tons of time for people who only want to spend 2 minutes at the store, and if the website is well designed, can still generate impulse buys.
In an era when everyone knows everything, it is hard for retailers to really differentiate themselves. Companies like Publix, which continuously innovate for the customers’ interest, create an image of a ‘customer first’ retailer. Whether or not these experiments become successful is a different matter but they do go a long way in creating a favorable image of the retailer in the minds of its customers.