While it might lack the scope of the Fortune 500 or the vivacity of People’s Most Beautiful, when Progressive Grocer names its list of the year’s Top 50 Grocers, we snap to attention. This is our Academy Awards and Super Bowl, so forgive us if we take some time to read the tea leaves.
The headline news (and no big surprise) is the sudden appearance of Amazon on the list, coming in at number 8 with a bullet. But Amazon’s debut, due entirely to their purchase of Whole Foods, doesn’t just signal a major new player in the space. It heralds an entirely new mode of engaging, and retaining, customers.
It’s a tectonic shift that might not be immediately visible — after all, the top six grocers on PG’s list didn’t move from last year’s rankings — both independent and chain grocers are making big moves to protect against the 800-pound disruptor in the room.
As PG notes, “To defend themselves and even fight back, they’re doing things like… launching more personalized, shopper-friendly ecommerce platforms… launching meal kits or working with/purchasing established meal-kit services; and, to stay relevant, fundamentally changing their in-store and digital setups to create the omnichannel experience that grocers today require.”
Even smaller grocery retailers are finding the need to embrace more of the fundamentals of Relationship Commerce. According to polling conducted by PG, in the last year alone the number of grocers with a fully integrated omnichannel strategy in place has more than doubled (up to 28% from 12.2%).
“And while Amazon might have many grocers backed into a corner,” PG reports, “these retailers aren’t going down without a fight: Nearly three in four (73.6 percent) respondents plan to increase their technology spend in 2018.”
Of course, tech alone isn’t going to solve the problems for grocers who are seeing their customers lured away by more highly personalized and targeted offerings from their competitors. And while the data generated from omnichannel experiences is an incredibly valuable commodity, without the right tools, that data can prove to be just more noise.
As Professor Scott Galloway recently noted (and we’re fond of repeating, mantra-like), “Online grocery is about to be the most innovative part of U.S. retail.” And the winners and losers won’t be judged by the size of their tech stack, but by the strength of their customer relationships.