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Busy Lifestyles Feeding Online Food Market

The days of combing the aisles of brick and mortar grocery stores for pantry staples and fresh ingredients remain far from over, but online meal alternatives entice time-strapped consumers with diverse, convenient, quick and often health-conscious menus.

Choices include pickup or home delivery of groceries from a favorite supermarket, full-blown meal kits supplying pre-portioned fresh ingredients with chef-created recipes, pre-prepared fresh meals to pop into the microwave, or favorite restaurant cuisine made to order.

Food options in the Quad Cities include ClickList, a curbside grocery pickup at the Prescott Valley Fry’s; Envoy, a family concierge service incorporating food shopping; and multiple online meal kit providers such as Home Chef and Hello Fresh.

Advance estimates of U.S. retail and food services sales for September 2017 were $483.9 billion, according to the United States Census Bureau, citing an increase of 4.4 percent from one year earlier. Online sales in the grocery sector for 2018 comprise only a small portion of those transactions at $17.5 billion, according to statista.com. However, millennials’ comfort and savvy with digital apps imply even more inroads as this generation marries and starts families.

Only about 5 percent of primary household shoppers surveyed in 2016 expressed a preference for grocery shopping online, statista.com reports. On average, such online shoppers visited about 2.2 websites during a shopping “trip,” and most often ordered snacks, health and beauty items and/or paper products. In 2015, about one third of consumers placed an order for groceries online, the survey shows. Among the factors noted as limiting broader acceptance is the inability to see, touch and feel products being purchased.

“Online sales have been around since the ‘90s and account for up to 8 percent of the retail market,” according to Morgan Stanley Company Research. “They are growing at a 14 percent annual rate, versus 4 percent for total retail sales. Some of the largest e-commerce businesses have expanded from niche specialties, such as books and music, to electronics, toys and household goods to products that require a timely, efficient distribution [food] and product expertise [auto parts].”

That online food distribution sector, headlined by Amazon and Walmart in 2016, is poised to heat up considerably with Amazon’s $13.7 billion acquisition of Whole Foods. Bolstered by Amazon’s significant data gathering capabilities and its time-acquired insights into consumer behavior, Amazon’s food business has been portrayed as a significant challenge to any number of meal-related businesses, from groceries to restaurants to the farms that supply them. The Associated Press reports that such businesses already are aligning themselves with either Amazon or Walmart, and gearing up for drone drops, electronic entry to kitchens and/or refrigerators for delivery personnel and other enhancements.

In the Quad Cities, the Prescott Valley Fry’s is the only venue participating in the ClickList service offered through its parent, The Kroger Company. That local trial involves consumer pickup of orders placed online. In other markets across the country, home delivery also is being piloted.

“A large majority of ClickList customers tend to be working families with young children,” explained Pam Giannonatti, corporate affairs manager for Fry’s Food Stores – The Kroger Company. “But [the service] also expands to anyone looking for the same Fry’s customer experience as inside the stores with added convenience and time savings. [It’s] really a wide range of customers.”

Here is how it works. Shoppers visit frysfood.com/clicklist, sign up with their Fry’s VIP card, and create a grocery cart online.

“They choose the location most convenient for them, as well as a pickup time that best works for them,” Giannonatti explained. “Customers then just arrive at the store within their pickup window and park in the designated area while our ClickList associates bring out their order and load [it] into the customer’s car.”

The buyer never has to get out of the vehicle for the handoff, which includes a $4.95 service fee per order added to the standard consumer pricing for goods in the store. New customers, Giannonatti added, are extended a waiver of that service charge on their first three orders.

ClickList accepts both digital and paper coupons, and “our associates are highly trained in ensuring they are selecting the freshest and highest quality items for customers each and every day,” Giannonatti stated.

A home delivery option just entering the Quad Cities market is Envoy, a venture-backed startup corporation based in San Francisco since 2012 and currently operating in eight states, covering cities such as Phoenix and Scottsdale. The company is in the process of expanding its footprint in Arizona and other states in anticipation of national coverage.

 

Many Envoy clients “start out with grocery shopping services, but we also bring prescriptions from the local pharmacy, fresh produce from the local farmer’s market, gardening supplies from Home Depot or even take clients to the store and accompany them while shopping,” said Madison Mathis, Envoy’s head of operations.

 

“We are a family concierge service especially designed for the rapidly-growing number of families who are balancing career, kids and caring for elder loved ones,” Mathis shared. “Not only are we helping seniors who are seeking to maintain their independence stay in their homes longer and live life to the fullest, we also bring tremendous relief and peace of mind to their family members, to the extent they also use our services to make their own lives easier, too. One of the most common ways we help families is by making sure loved ones are eating well.”

 

The most popular shopping venues among Envoy’s clients include Trader Joe’s, Whole Foods, Costco and Target, she noted. The service employs a membership model, similar to Amazon Prime, Costco and AAA, with signups accepted at helloenvoy.com. After a 30-day free trial, membership costs $19 a month and allows access to apps, an Envoy assistant, and additional benefits. Each member is matched to a trained Envoy assistant in the area.

“What sets Envoy apart is the one-to-one trusted relationship you can have with your very own local Envoy assistant, who sees you each visit and gets to know you over time,” Mathis explained. “We combine that relationship with the convenience of apps to make setting up and managing visits easy, but we also provide a concierge desk that is able to personally assist our members who may need that extra bit of friendly help when it comes to getting the most out of the service.”

Pricing for Envoy’s shopping assistance is $12 per trip plus a 10 percent fee on the amount of purchases, with original receipts provided. Other services, such as transportation and in-home help, are priced at $25 an hour in Prescott.

Regarding impact of the Amazon/Whole Foods strategy on Envoy’s prospects, Mathis stated, “We are fairly unaffected, as our clients are specifically looking for the personal, trusted relationship with an Envoy assistant, and the greater range of services we can provide.

“Our Envoy assistants are amazing people who are looking to earn flexible income on the side but to do it in a meaningful way that makes a positive difference in the lives of others. Our Envoys range from stay-at-home moms to early retirees in their encore careers. The process to become an Envoy assistant is highly selective, fewer than five percent of applicants make it through our screening and on-boarding process. Of course, Envoys must go through a rigorous background check as well.”

Mathis offers what she describes as “fair warning” about limited service availability in the near term as Envoy’s local effort ramps up, and begs understanding as the company continues its local recruitment to achieve full operations in the area. Meanwhile, Home Chef, Hello Fresh and others offer meal kit options to try out. QCBN

By Sue Marceau, QCBN

 Photo caption:

Food kit services, such as Chicago-based Home Chef, deliver pre-measured ingredients and chef-created recipes. Wine not included.

Photo by Sue Marceau.

 

 

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