Why Green Tea and a Bag of Chocolate Chips Should Strike Fear into the Hearts of Grocers
In order to do this article justice, I’m going to have to wander pretty far into my personal shopping habits. I don’t make the mistake of thinking that I behave like most consumers, nor that most consumers behave like me. However, I have noticed a new shopping behavior on my part over the last six months, and it’s one that’s worth noting.
I’ve made no bones about the fact that Target is my grocery store. However, a little over six months ago, I started finding it difficult to get a specific green tea and juice drink that I like: Lipton’s Diet Sparkling Green Tea with Strawberry Kiwi. One week it was there, the next week it would be out of stock. The shelf label would be there, but sometimes there would just flat out be an empty space, and sometimes another flavor of the brand, usually the non-sparkling Diet Green Tea with Raspberry, would be shoved into the Kiwi & Strawberry’s place.
When it started happening more than one week in a row, I rapidly came to the conclusion that I was going to have to find something else to drink. I remember having a slightly helpless moment when I looked along the row of all the other products stocked at that end of the aisle and thought “There’s no way I’m going to stand here and devote the time to figure out what else I might want to buy. ” And so I decided that I would go home and take advantage of the power of online to at least evaluate my options.
At that point in time, I seriously approached it as simply an exercise in narrowing my choices. I had no intention of buying online – I mean, really, there aren’t too many things farther down the list to have shipped to your house than $15 worth of a fruit drink, even with Amazon Prime (and as it turned out, Lipton apparently decided to discontinue the product, so I wasn’t going to be able to get it too much longer anyway).
When I did my research, I rapidly narrowed my choices down to one that I liked: Arizona Pomegranate Green Tea. I found it on, you guessed it, Amazon. And even though I would have to buy it as a mix, and mass quantities of the mix (16 2-quart packets), it was a better deal than the Lipton tea. AND – it was available on subscription. The first time I bought it, I didn’t subscribe – I wasn’t sure what my frequency of purchase was really going to be. But just a couple of months ago, I found I was down to my last little packet and it was time to reorder – and lo and behold, Target has now lost my green tea drink purchase to a subscription to Amazon.
At the time, I didn’t think too much of it. I mean, part of the reason why the mix was reasonable was because no one was having to ship liquids to me. Last time I checked, it costs about $30 to ship a 32-pack of cans of Diet Coke. I don’t think it’s any coincidence that Diet Coke is not available via Prime.
But then just this month, we forgot to buy from Costco (we make a monthly trip there) a 72-oz bag of Nestle semi-sweet chocolate chips. Between homemade trail mix and the occasional batches of chocolate chip cookies and pancakes, my family goes through one of those big bags about once a quarter. We might’ve missed it as we were shopping Costco, or the store might not have carried it that month. Either way, I realized a couple of days later as I was standing in my kitchen that we had not purchased the bag and my first thought was definitely NOT that I would wait until next month and check at Costco in March. Nope. I pulled out my phone and checked Amazon. And two days and $15 later, I got a bag of chocolate chips delivered to my house.
On the one hand, even wearing my “consumer ” hat, I felt a little ridiculous. I can’t bring myself to believe that anyone really made money on this order, besides maybe Smurfit Stone who might’ve made the cardboard box, and UPS, who delivered it:
On the other hand, when I need chocolate chips in a couple of months, where am I going to check first? Amazon. Because as soon as I know my frequency of purchase, I can just lump it in with the other things I get on subscription. That list is currently up to 5 items, all delivered with different frequencies. If I can get that up to 5 items shipped every month – doesn’t have to be the same items – then I can save even more on my subscription.
Grocery retailing has been very slow to adopt online retailing, undoubtedly for the same reason why I won’t be buying cans of Diet Coke online anytime soon. But, at least for this shopper, Amazon is on its way to figuring out online grocery, one subscription at a time. As a consumer I’ve reached the point where the physical stores that I frequent – Target mostly, with occasional trips to King Soopers (a Kroger banner) and Safeway – are going to find my shopping basket eroding over time. SKU rationalization, in this environment, is a huge mistake because if you rationalize away (or if you’re a major brand and you discontinue my favorite product), there is absolutely no guarantee that you’ll simply switch me to another product on the shelf.
And there will be a tipping point, where the only goods I’m buying from a physical store are those that are still enormously uneconomical to ship, or fresh items that I want to pick out myself. Personally, I’m not there yet. I’m not your average shopper, but it’s fair to say that I’m probably a leading-edge shopper. If that’s true, then the clock is definitely ticking for grocery. It’s time to figure out online shopping – in fact, more crucially, it’s time for grocery to figure out omni-channel shopping. Before Amazon chips it all away via subscription.